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Education and Social Mobility

  • Helmuth Cremer
  • Philippe De 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 degree 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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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2010/wp-cesifo-2010-02/cesifo1_wp2951.pdf
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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2951.

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Date of creation: 2010
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Handle: RePEc:ces:ceswps:_2951
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  1. CREMER, Helmuth & PESTIAU, Pierre & RACIONERO, Maria, 2007. "Unequal wages for equal utilities," CORE Discussion Papers 2007095, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  2. Eric A. Hanushek & Ludger Woessmann, 2007. "The Role of School Improvement in Economic Development," CESifo Working Paper Series 1911, CESifo Group Munich.
  3. Arrow, Kenneth J, 1971. "A Utilitarian Approach to the Concept of Equality in Public Expenditure," The Quarterly Journal of Economics, MIT Press, vol. 85(3), pages 409-15, August.
  4. Bovenberg, A Lans & Jacobs, Bas, 2001. "Redistribution and Education Subsidies are Siamese Twins," CEPR Discussion Papers 3099, C.E.P.R. Discussion Papers.
  5. Herschel I. Grossman & Minseong Kim, 2003. "Educational Policy: Egalitarian or Elitist?," Economics and Politics, Wiley Blackwell, vol. 15(3), pages 225-246, November.
  6. Daniel Mejía & Marc St-Pierre, 2006. "Unequal Opportunities and Human Capital Formation," BORRADORES DE ECONOMIA 003737, BANCO DE LA REPÚBLICA.
  7. Darío Maldonado, 2008. "Education policies and optimal taxation," International Tax and Public Finance, Springer, vol. 15(2), pages 131-143, April.
  8. De Fraja, Gianni, 2002. "The Design of Optimal Education Policies," Review of Economic Studies, Wiley Blackwell, vol. 69(2), pages 437-66, April.
  9. repec:dgr:uvatin:20050036 is not listed on IDEAS
  10. Bruno, Michael, 1976. "Equality, complementarity and the incidence of public expenditures," Journal of Public Economics, Elsevier, vol. 6(4), pages 395-407, November.
  11. Gottschalk, Peter & Spolaore, Enricco, 2002. "On the Evaluation of Economic Mobility," Review of Economic Studies, Wiley Blackwell, vol. 69(1), pages 191-208, January.
  12. Ulph, David, 1977. "On the optimal distribution of income and educational expenditure," Journal of Public Economics, Elsevier, vol. 8(3), pages 341-356, December.
  13. Brett, Craig & Weymark, John A., 2008. "The impact of changing skill levels on optimal nonlinear income taxes," Journal of Public Economics, Elsevier, vol. 92(7), pages 1765-1771, July.
  14. Atkinson, Anthony B & Bourguignon, Francois, 1982. "The Comparison of Multi-Dimensioned Distributions of Economic Status," Review of Economic Studies, Wiley Blackwell, vol. 49(2), pages 183-201, April.
  15. repec:dgr:uvatin:2005036 is not listed on IDEAS
  16. A. Lans Bovenberg & Bas Jacobs, 2005. "Redistribution and Education Subsidies are Siamese Twins," Tinbergen Institute Discussion Papers 05-036/3, Tinbergen Institute.
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