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Public education and capital accumulation

  • Boldrin, Michele

I study an overlapping generations model where physical and human capitals are inputs of production that can be accumulated by witholding resources from current consumption. Human capital is the output of a schooling system which can be financed either by private expenditures or by taxes on current income or by a combination of both. In a political equilibrium with majority voting, public school financing appears as an instrument to solve a "free rider problem". By improving the skills of next period's workers it increases the expected return on capital, something which cannot be achieved by means of private school only. Public schools turn out to be an instrument for intergenerational income redistribution and they may be preferred to private schools just for this motive.

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Article provided by Elsevier in its journal Research in Economics.

Volume (Year): 59 (2005)
Issue (Month): 2 (June)
Pages: 85-109

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Handle: RePEc:eee:reecon:v:59:y:2005:i:2:p:85-109
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  13. Michele Boldrin & Larry E. Jones & Aubhik Khan, 2005. "Three Equations Generating an Industrial Revolution?," Levine's Bibliography 784828000000000385, UCLA Department of Economics.
  14. Michele Boldrin & Ana Montes, 2005. "The Intergenerational State Education and Pensions," Review of Economic Studies, Oxford University Press, vol. 72(3), pages 651-664.
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  19. Michele Boldrin, 1991. "Threshold Externalities and Economic Development: A Note," Discussion Papers 953, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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  28. Michele Boldrin & Aldo Rustichini, 2000. "Political Equilibria with Social Security," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 3(1), pages 41-78, January.
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