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Financing public education: a political economy model with altruistic agents and retirement concerns

  • Amedeo Piolatto

    (Universidad de Alicante)

Public services provision depends on tax proceeds. The tax rate to finance public school is chosen through majority voting. Under the monotonicity condition implying that the preferred tax rate is decreasing in income, the literature predicts that the median voter is decisive and poor agents form a coalition against rich agents. I show that this does not occur and a coalition of the type "ends against the middle" occurs if agents care about others' level of education. I use a OLG model, in which adults are altruist and retirees’ pension depends on average education (used as a proxy for productivity).

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File URL: http://www.ivie.es/downloads/docs/wpasad/wpasad-2011-12.pdf
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Paper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie AD with number 2011-12.

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Length: 32 pages
Date of creation: Apr 2011
Date of revision:
Publication status: Published by Ivie
Handle: RePEc:ivi:wpasad:2011-12
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