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Stratified or Comprehensive? The Economic Efficiency of School Design

  • Giorgio Brunello
  • Massimo Giannini

We study the efficiency of secondary school design by focusing on the degree of differentiation between vocational and general education. Using a simple model of endogenous job composition, we analyze the interaction between relative demand and relative supply of skills and characterize efficient school design when the government runs schools and cares about total net output. We show that neither a comprehensive nor a stratified system unambiguously dominates the other system in terms of efficiency for all possibile values of the underlying parameters. Since comprehensive systems generate more equal labor market outcomes, it follows that the relationship between efficiency and equity in secondary education is not necessarily a trade off. We also show that net output maximizing government policy is not always supported by majority voting. When schools are stratified, majority voting could increase the elitist nature of general schools by rising the admission standard above efficient levels. At the same time, and depending on the values of the underlying parameters, efficient stratified schools could be voted down in favor of less efficient comprehensive schools.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 453.

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Date of creation: 2001
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Handle: RePEc:ces:ceswps:_453
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  1. Daron Acemoglu, 1998. "Changes in Unemployment and Wage Inequality: An Alternative Theory and Some Evidence," NBER Working Papers 6658, National Bureau of Economic Research, Inc.
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  9. Epple, Dennis & Newlon, Elizabeth & Romano, Richard, 2002. "Ability tracking, school competition, and the distribution of educational benefits," Journal of Public Economics, Elsevier, vol. 83(1), pages 1-48, January.
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  11. Gould, Eric D & Moav, Omer & Weinberg, Bruce A, 2001. " Precautionary Demand for Education, Inequality, and Technological Progress," Journal of Economic Growth, Springer, vol. 6(4), pages 285-315, December.
  12. Betts, Julian R, 1998. "The Impact of Educational Standards on the Level and Distribution of Earnings," American Economic Review, American Economic Association, vol. 88(1), pages 266-75, March.
  13. De Fraja, Gianni, 1998. "The Design of Optimal Education Policies," CEPR Discussion Papers 1792, C.E.P.R. Discussion Papers.
  14. Oded Galor & Omer Moav, 1998. "Ability Biased Technological Transition, Wage Inequality, and Economic Growth," Working Papers 98-14, Brown University, Department of Economics.
  15. De Fraja, Gianni, 1999. "Equal Opportunities in Education: Market Equilibrium and Public Policy," CEPR Discussion Papers 2090, C.E.P.R. Discussion Papers.
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