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Redistributive taxation vs. education subsidies: Fostering equality and social mobility in an intergenerational model

  • Schneider, Andrea

Redistributive taxation and education subsidies are common policies intended to foster education attendance of poor children. However, this paper shows that in an intergenerational framework, these policies can raise social mobility only for some investment situations but not in general. I also study the impact of both policies on the aggregate skill ratio and inequality. While redistributive taxation can raise social mobility but at the same time never reduces inequality, education subsidies can, under some conditions, achieve both simultaneously. Unfortunately, these conditions necessarily require a population in which the skill ratio is already quite high.

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Article provided by Elsevier in its journal Economics of Education Review.

Volume (Year): 29 (2010)
Issue (Month): 4 (August)
Pages: 597-605

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Handle: RePEc:eee:ecoedu:v:29:y:2010:i:4:p:597-605
Contact details of provider: Web page: http://www.elsevier.com/locate/econedurev

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  18. Dilip Mookherjee & Debraj Ray, 2008. "A Dynamic Incentive-Based Argument for Conditional Transfers," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-170, Boston University - Department of Economics.
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