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Income Distribution, Communities, and the Quality of Public Education

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  • Raquel Fernandez
  • Richard Rogerson

Abstract

This paper develops a multicommunity model and analyzes policies that affect spending on public education and its distribution across communities. We find that policies that on net increase the fraction of the (relatively) wealthiest residents in the poorest community are welfare enhancing; policies that decrease this fraction can make all worse off. Appropriately financed policies to (i) redistribute income toward the poorest, (ii) increase spending on education in the poorest community, and (iii) make the poorest community more attractive to relatively wealthier individuals, produce chain reactions in which the quality of education increases and tax rates fall in all communities.

Suggested Citation

  • Raquel Fernandez & Richard Rogerson, 1996. "Income Distribution, Communities, and the Quality of Public Education," The Quarterly Journal of Economics, Oxford University Press, vol. 111(1), pages 135-164.
  • Handle: RePEc:oup:qjecon:v:111:y:1996:i:1:p:135-164.
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    References listed on IDEAS

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    1. Gary S. Becker & Kevin M. Murphy & Robert Tamura, 1994. "Human Capital, Fertility, and Economic Growth," NBER Chapters,in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education (3rd Edition), pages 323-350 National Bureau of Economic Research, Inc.
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    6. Oded Galor & Joseph Zeira, 1993. "Income Distribution and Macroeconomics," Review of Economic Studies, Oxford University Press, vol. 60(1), pages 35-52.
    7. William G. Gale & John Karl Scholz, 1991. "Intergenerational Transfers and the Accumulation of Wealth," UCLA Economics Working Papers 624, UCLA Department of Economics.
    8. Nakamura, Ryohei, 1985. "Agglomeration economies in urban manufacturing industries: A case of Japanese cities," Journal of Urban Economics, Elsevier, vol. 17(1), pages 108-124, January.
    9. Marshall, Alfred, 1890. "The Principles of Economics," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number marshall1890.
    10. William G. Gale & John Karl Scholz, 1994. "Intergenerational Transfers and the Accumulation of Wealth," Journal of Economic Perspectives, American Economic Association, pages 145-160.
    11. Henderson, Vernon & Becker, Randy, 2000. "Political Economy of City Sizes and Formation," Journal of Urban Economics, Elsevier, vol. 48(3), pages 453-484, November.
    12. Wagner, Alfred, 1891. "Marshall's Principles of Economics," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, pages 319-338.
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