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Education, Utilitarianism, and Equality of Opportunity

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  • Villar Notario Antonio

    (PABLO DE OLAVIDE UNIVERSITY ANDIVIE)

  • Calo-Blanco Aitor

    (UNIVERSITY OF ALICANTE PABLO DE OLAVIDE UNIVERSITY VALENCIAN ECONOMIC RESEARCH INSTITUTE (Ivie))

Abstract

We analyze in this working paper the impact of different policies on the investment of families in the education of their children. In the model we present, families make decisions on the level of human capital of their offspring with a view to the future income that this capital will entail (under the assumption that higher education levels yield higher expected income). Families optimal investment in education depends on their preferences (summarized by their time discount and risk aversion parameters) and their circumstances (initial wealth, parents education, and children s natural abilities). The public authority designs a balanced tax/subsidy scheme in order to maximize aggregate welfare. We compare the case of a purely utilitarian planner with one that cares about the equality of opportunity.

Suggested Citation

  • Villar Notario Antonio & Calo-Blanco Aitor, 2009. "Education, Utilitarianism, and Equality of Opportunity," Working Papers 201051, Fundacion BBVA / BBVA Foundation.
    • Handle: RePEc:fbb:wpaper:201051
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    References listed on IDEAS

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    1. Arnaud Lefranc & Nicolas Pistolesi & Alain Trannoy, 2006. "Equality of opportunity: Definitions and testable conditions, with an application to income in France," Working Papers 53, ECINEQ, Society for the Study of Economic Inequality.
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    5. Calo-Blanco Aitor & Villar Notario Antonio, 2010. "Quality of Education and Equality of Opportunity in Spain: Lesson from Pisa," Working Papers 20104, Fundacion BBVA / BBVA Foundation.
    6. Roemer, John E. & Aaberge, Rolf & Colombino, Ugo & Fritzell, Johan & Jenkins, Stephen P. & Lefranc, Arnaud & Marx, Ive & Page, Marianne & Pommer, Evert & Ruiz-Castillo, Javier, 2003. "To what extent do fiscal regimes equalize opportunities for income acquisition among citizens?," Journal of Public Economics, Elsevier, vol. 87(3-4), pages 539-565, March.
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    Cited by:

    1. Aitor Calo, 2009. "Equality of opportunity and optimal effort decision under uncertainty," Working Papers. Serie AD 2009-12, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).

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    More about this item

    Keywords

    Equality of opportunity; investment in education; public policy design.;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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