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Subsidizing or taxing education? A note on the quality gap and government finances

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  • Daniel Flores Curiel

    (Universidad Autónoma de Nuevo León)

Abstract

In this article, I study the effects of an education tax (or subsidy) on the quality gap between public and private education as well as on government finances. In order to do this, I model the behavior of a private school that chooses price and quality in order to compete for students with a public school. Among other things, I show that a per unit tax (or subsidy) can increase (reduce) the quality gap and worsen (improve) government finances.

Suggested Citation

  • Daniel Flores Curiel, 2016. "Subsidizing or taxing education? A note on the quality gap and government finances," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 31(2), pages 339-353.
    • Handle: RePEc:emx:esteco:v:31:y:2016:i:1:p:339-353
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    References listed on IDEAS

    as
    1. Stiglitz, J. E., 1974. "The demand for education in public and private school systems," Journal of Public Economics, Elsevier, vol. 3(4), pages 349-385, November.
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    More about this item

    Keywords

    education; quality; taxes; subsidies;
    All these keywords.

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid

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