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Inequality, opting-out and public education funding

Author

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  • Calin Arcalean

    (Ramon Llull University)

  • Ioana Schiopu

    (Ramon Llull University)

Abstract

We investigate the effect of inequality on the political support for public education funding in a model of endogenous fertility and school choice. In contrast to recent literature we show that when household income heterogeneity is consistent with the skewness of empirical income distributions, inequality can drive education spending in opposite directions in poor and rich economies. A mean preserving spread increases tax rates and public school enrollment, but decreases public spending per student in low income economies, while it has opposite effects at high income levels. An increase in the average income level can also have non-monotonic effects.

Suggested Citation

  • Calin Arcalean & Ioana Schiopu, 2016. "Inequality, opting-out and public education funding," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 46(4), pages 811-837, April.
    • Handle: RePEc:spr:sochwe:v:46:y:2016:i:4:d:10.1007_s00355-015-0937-9
    DOI: 10.1007/s00355-015-0937-9
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    Cited by:

    1. Paolo Melindi‐Ghidi, 2018. "Inequality, educational choice, and public school quality in income‐mixing communities," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 20(6), pages 914-943, December.
    2. Majda Benzidia & Michel Lubrano & Paolo Melindi-Ghidi, 2016. "Education Politics, Schooling Choice and Public School Quality: The Impact of Income Polarisation," AMSE Working Papers 1642, Aix-Marseille School of Economics, France.
    3. Yuki Uchida & Tetsuo Ono, 2020. "Inequality and education choice," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 27(4), pages 980-1018, August.
    4. Debora Di Gioacchino & Laura Sabani & Stefano Usai, 2023. "Why does education expenditure differ across countries? The role of income inequality, human capital and the inclusiveness of education systems," Working Papers in Public Economics 236, University of Rome La Sapienza, Department of Economics and Law.
    5. Meier, Volker & Schiopu, Ioana, 2020. "Enrollment expansion and quality differentiation across higher education systems," Economic Modelling, Elsevier, vol. 90(C), pages 43-53.
    6. Dotti, Valerio, 2019. "The political economy of public education," Research in Economics, Elsevier, vol. 73(1), pages 35-52.
    7. Yeşilırmak, Muharrem, 2019. "Bonus pay for teachers, spatial sorting, and student achievement," European Journal of Political Economy, Elsevier, vol. 59(C), pages 129-158.
    8. Lesly Cassin & Paolo Melindi-Ghidi & Fabien Prieur, 2021. "The impact of income inequality on public environmental expenditure with green consumerism," Working Papers 2021.08, FAERE - French Association of Environmental and Resource Economists.
    9. Yuki Uchida, 2018. "Education, social mobility, and the mismatch of talents," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 65(3), pages 575-607, May.
    10. Lesly Cassin & Paolo Melindi-Ghidi & Fabien Prieur, 2021. "Voting for environmental policy with green consumers: the impact of income inequality," CEE-M Working Papers hal-03146526, CEE-M, Universtiy of Montpellier, CNRS, INRA, Montpellier SupAgro.

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    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid

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