Can cultural education crowd out arts subsidization ?

The debate about whether the arts should be supported or not is far from being recent, and most governments support the arts in one way or the other. The literature considers several arguments in favor of such interventions. Education may seem as an action which could, in the long run, lead to possible reductions of subsidies. Surveys show that those who have been exposed to the arts when young, participate more when adult. However, the 'non-market' transmission from parents to children, generates an external effect, which has to be taken into account to reach first-best situations. We construct an overlapping generations model in which young consumers are exposed to both public education towards the arts and transmission of such a taste from their parents and show that the first-best can be reached only if there is both public cultural education and subsidization of arts consumption. Education can, therefore, not be considered as a substitute for subsidies to arts consumption though the situations that prevail in most European countries point to subsidizing education, while consumption, especially of the older generations, should be taxed rather than subsidized."