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A Dynamic General Equilibrium Analysis of the Political Economy of Public Education

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  • Jorge Soares

    (Department of Economics,University of Delaware)

Abstract

The primary objective of this paper is to highlight the distinct roles of altruism and of self-interest in the political determination of a public education policy. I assess the relative importance of three factors in the determination of the equilibrium level of this policy: altruism, the impact of public funding of education on social security benefits and its impact on factor prices. I then focus on the impact of implementing a social security system on the equilibrium levels of education funding and on welfare. I find that although, in the benchmark economy, the presence of social security might generate support for public funding of education, its overall effect on the well-being of individuals is negative for any level of social security taxation.

Suggested Citation

  • Jorge Soares, 2005. "A Dynamic General Equilibrium Analysis of the Political Economy of Public Education," Working Papers 05-05, University of Delaware, Department of Economics.
    • Handle: RePEc:dlw:wpaper:05-05
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    References listed on IDEAS

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    1. Michele Boldrin & Ana Montes, 2005. "The Intergenerational State Education and Pensions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 72(3), pages 651-664.
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    5. Thomas F. Cooley & Jorge Soares, 1999. "A Positive Theory of Social Security Based on Reputation," Journal of Political Economy, University of Chicago Press, vol. 107(1), pages 135-160, February.
    6. Alexander Kemnitz, 2000. "Social security, public education, and growth in a representative democracy," Journal of Population Economics, Springer;European Society for Population Economics, vol. 13(3), pages 443-462.
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    9. Soares, Jorge, 2003. "Self-interest and public funding of education," Journal of Public Economics, Elsevier, vol. 87(3-4), pages 703-727, March.
    10. Gerhard Glomm & Michael Kaganovich, 2003. "Distributional Effects of Public Education in an Economy with Public Pensions," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(3), pages 917-937, August.
    11. Krusell, Per & Quadrini, Vincenzo & Rios-Rull, Jose-Victor, 1997. "Politico-economic equilibrium and economic growth," Journal of Economic Dynamics and Control, Elsevier, vol. 21(1), pages 243-272, January.
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    Citations

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    Cited by:

    1. Ono, Tetsuo & Uchida, Yuki, 2018. "Human capital, public debt, and economic growth: A political economy analysis," Journal of Macroeconomics, Elsevier, vol. 57(C), pages 1-14.
    2. Ono, Tetsuo & Uchida, Yuki, 2016. "Pensions, education, and growth: A positive analysis," Journal of Macroeconomics, Elsevier, vol. 48(C), pages 127-143.
    3. Tetsuo Ono & Yuki Uchida, 2018. "Capital Income Taxation, Economic Growth, and the Politics of Public Education," Discussion Papers in Economics and Business 18-05, Osaka University, Graduate School of Economics.
    4. Uchida, Yuki & Ono, Tetsuo, 2021. "Generational conflict and education politics: Implications for growth and welfare," Journal of Macroeconomics, Elsevier, vol. 69(C).
    5. Uchida, Yuki & Ono, Tetsuo, 2021. "Political economy of taxation, debt ceilings, and growth," European Journal of Political Economy, Elsevier, vol. 68(C).
    6. Uchida, Yuki & Ono, Tetsuo, 2022. "Politics of Public Education and Pension Reform with Endogenous Fertility," MPRA Paper 112748, University Library of Munich, Germany.
    7. Michael Kaganovich & Volker Meier, 2012. "Social Security Systems, Human Capital, and Growth in a Small Open Economy," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 14(4), pages 573-600, August.
    8. Tetsuo Ono, 2015. "Public education and social security: a political economy approach," Economics of Governance, Springer, vol. 16(1), pages 1-25, February.
    9. Bishnu, Monisankar & Wang, Min, 2017. "The political intergenerational welfare state," Journal of Economic Dynamics and Control, Elsevier, vol. 77(C), pages 93-110.
    10. John Creedy & Solmaz Moslehi, 2014. "The composition of government expenditure with alternative choicemechanisms," New Zealand Economic Papers, Taylor & Francis Journals, vol. 48(1), pages 53-71, April.
    11. Economides, George & Philippopoulos, Apostolis & Sakkas, Stelios, 2017. "Tuition fees: User prices and private incentives," European Journal of Political Economy, Elsevier, vol. 48(C), pages 91-103.
    12. Kaganovich, Michael & Zilcha, Itzhak, 2012. "Pay-as-you-go or funded social security? A general equilibrium comparison," Journal of Economic Dynamics and Control, Elsevier, vol. 36(4), pages 455-467.
    13. Georges Casamatta & L. Batté, 2016. "The Political Economy of Population Aging," Post-Print hal-02520521, HAL.
    14. Tetsuo Ono, 2014. "Economic Growth and the Politics of Intergenerational Redistribution," Discussion Papers in Economics and Business 14-17, Osaka University, Graduate School of Economics.
    15. George Economides & Apostolis Philippopoulos & Stylianos Sakkas, 2021. "Redistributive policies in general equilibrium," JRC Working Papers on Territorial Modelling and Analysis 2021-08, Joint Research Centre.
    16. Michael Kaganovich & Itzhak Zilcha, 2008. "Alternative Social Security Systems and Growth," CESifo Working Paper Series 2353, CESifo.
    17. George Economides & Hyun Park & Apostolis Philippopoulos & Stelios Sakkas, 2015. "On the Composition of Public Spending and Taxes," CESifo Working Paper Series 5510, CESifo.
    18. John Creedy & Solmaz Moslehi, 2014. "The composition of government expenditure with alternative choicemechanisms," New Zealand Economic Papers, Taylor & Francis Journals, vol. 48(1), pages 53-71, April.
    19. Monisankar Bishnu & Min Wang, 2013. "The Political intergenerational welfare state: A Unified framework," Discussion Papers 13-08, Indian Statistical Institute, Delhi.
    20. Casamatta, G. & Batté, L., 2016. "The Political Economy of Population Aging," Handbook of the Economics of Population Aging, in: Piggott, John & Woodland, Alan (ed.), Handbook of the Economics of Population Aging, edition 1, volume 1, chapter 0, pages 381-444, Elsevier.

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    More about this item

    Keywords

    Public Education; Voting; General Equilibrium.;
    All these keywords.

    JEL classification:

    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid

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