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A Positive Theory of Income Redistribution

  • Cooper, Suzanne J
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    This article examines how redistribution of human capital expenditure can come about voluntarily. A model is developed in which, in the absence of redistribution, human capital expenditure is financed through tax revenue collected locally. However, circumstances are shown under which transfers of human capital expenditure across neighborhoods can take place voluntarily, even in the absence of interfamily altruism. These transfers can eliminate absolute inequality and reduce relative inequality. In addition, the effect on aggregate income of such human capital funding transfers across neighborhoods is evaluated. Empirical evidence supporting the model's implications for the impact of redistribution of human capital expenditure on the persistence of income inequality is presented Copyright 1998 by Kluwer Academic Publishers

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    Article provided by Springer in its journal Journal of Economic Growth.

    Volume (Year): 3 (1998)
    Issue (Month): 2 (June)
    Pages: 171-95

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    Handle: RePEc:kap:jecgro:v:3:y:1998:i:2:p:171-95
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    1. Galor, Oded & Zeira, Joseph, 1993. "Income Distribution and Macroeconomics," Review of Economic Studies, Wiley Blackwell, vol. 60(1), pages 35-52, January.
    2. Streufert, Peter, 2000. " The Effect of Underclass Social Isolation on Schooling Choice," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 2(4), pages 461-82.
    3. Galor, O. & Tsiddon, D., 1996. "The Distribution of Human Capital and Economic Growth," Papers 18-96, Tel Aviv - the Sackler Institute of Economic Studies.
    4. Durlauf, Steven N, 1996. " A Theory of Persistent Income Inequality," Journal of Economic Growth, Springer, vol. 1(1), pages 75-93, March.
    5. Zimmerman, David J, 1992. "Regression toward Mediocrity in Economic Stature," American Economic Review, American Economic Association, vol. 82(3), pages 409-29, June.
    6. Datcher, Linda P, 1982. "Effects of Community and Family Background on Achievement," The Review of Economics and Statistics, MIT Press, vol. 64(1), pages 32-41, February.
    7. de Bartolome, Charles A M, 1990. "Equilibrium and Inefficiency in a Community Model with Peer Group Effects," Journal of Political Economy, University of Chicago Press, vol. 98(1), pages 110-33, February.
    8. Hanushek, E-A & Rivkin, S-G & Taylor, L-L, 1995. "Aggregation and the Estimated Effects of School Resources," RCER Working Papers 397, University of Rochester - Center for Economic Research (RCER).
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