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Education and social mobility

  • Helmuth Cremer


  • Philippe Donder


  • Pierre Pestieau


This paper shows that the design of education policy involves a potential conflict between welfare and social mobility. We consider a setting in which social mobility is maximized under the least elitist public education system, whereas welfare maximization calls for the most elitist system. We show that when private education is available, the degree of elitism that maximizes social mobility increases, while the welfare-maximizing degree of elitism decreases. The ranking between the welfare- and mobility-maximizing degrees of elitism may even be reversed. Utilitarian welfare is always higher when private supplementary education is available, but social mobility may be reduced.

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Article provided by Springer & International Institute of Public Finance in its journal International Tax and Public Finance.

Volume (Year): 17 (2010)
Issue (Month): 4 (August)
Pages: 357-377

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Handle: RePEc:kap:itaxpf:v:17:y:2010:i:4:p:357-377
DOI: 10.1007/s10797-010-9133-0
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  1. Eric A. Hanushek & Ludger Woessmann, 2007. "The Role of School Improvement in Economic Development," NBER Working Papers 12832, National Bureau of Economic Research, Inc.
  2. Peter Gottschalk & Enrico Spolaore, 2002. "On the Evaluation of Economic Mobility," Review of Economic Studies, Oxford University Press, vol. 69(1), pages 191-208.
  3. Gianni de Fraja, 2002. "The Design of Optimal Education Policies," Review of Economic Studies, Oxford University Press, vol. 69(2), pages 437-466.
  4. Daniel Mejía & Marc St-Pierre, 2005. "Unequal Opportunities and Human Capital Formation," CESifo Working Paper Series 1383, CESifo Group Munich.
  5. Bovenberg, A Lans & Jacobs, Bas, 2001. "Redistribution and Education Subsidies are Siamese Twins," CEPR Discussion Papers 3099, C.E.P.R. Discussion Papers.
  6. Ulph, David, 1977. "On the optimal distribution of income and educational expenditure," Journal of Public Economics, Elsevier, vol. 8(3), pages 341-356, December.
  7. CREMER, Helmuth & PESTIEAU, Pierre & RACIONERO, Mario, . "Unequal wages for equal utilities," CORE Discussion Papers RP 2369, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  8. Darío Maldonado, 2008. "Education policies and optimal taxation," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 15(2), pages 131-143, April.
  9. H. I. Grossman & M. Kim, 1999. "Educational Policy: Egalitarian or Elitist?," Working Papers 365, Dipartimento Scienze Economiche, Universita' di Bologna.
  10. A. B. Atkinson & F. Bourguignon, 1982. "The Comparison of Multi-Dimensioned Distributions of Economic Status," Review of Economic Studies, Oxford University Press, vol. 49(2), pages 183-201.
  11. A. Lans Bovenberg & Bas Jacobs, 2005. "Redistribution and Education Subsidies are Siamese Twins," Tinbergen Institute Discussion Papers 05-036/3, Tinbergen Institute.
  12. Kenneth J. Arrow, 1971. "A Utilitarian Approach to the Concept of Equality in Public Expenditures," The Quarterly Journal of Economics, Oxford University Press, vol. 85(3), pages 409-415.
  13. Bruno, Michael, 1976. "Equality, complementarity and the incidence of public expenditures," Journal of Public Economics, Elsevier, vol. 6(4), pages 395-407, November.
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