Public Choice of an Education System and its Implications for Growth and Income Distribution
In this paper we employ a simple overlapping generations model of growth to examine two extreme modes of government intervention in the provision of education: education subsidies for private provision and uniform public provision, both funded by a proportional income tax. Comparing them with regard to tehir impact on growth and income distribution, and their relative popularity, we find little conflict between democracy and growth in the choice of education system: the same factors that provide for political support for subsidization over public provision -- larger external benefits, a greater propensity to consume leisure, and less inequality -- also favor its relative growth performance.
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