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Education Choice, Neoclassical Growth and Class Structure

  • Buly A Cardak


    (Department of Economics and Finance, La Trobe University)

The evolution of income distribution is studied in a dynamic model of education choice. In this model, both public and private education are available. Public education is financed using a tax rate determined by majority voting. The analysis focuses on neoclassical growth in order to ensure tractability in identifying a steady state. The steady state income distribution is found to be bimodal. Public education offers higher growth to the poor in the transition to the steady state, however public education students converge to the lower mode of the income distribution. Under some conditions, universal public education offers steads state human capital superior to that available to any student in the mixed education model considered, while universal private education unconditionally offers steady state human capital superior to that of the mixed model.

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Paper provided by School of Economics, La Trobe University in its series Working Papers with number 2001.07.

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Length: 14 pages
Date of creation: Aug 2001
Date of revision:
Handle: RePEc:ltr:wpaper:2001.07
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  1. Epple, Dennis & Romano, Richard E., 1996. "Ends against the middle: Determining public service provision when there are private alternatives," Journal of Public Economics, Elsevier, vol. 62(3), pages 297-325, November.
  2. Buly A Cardak, 2002. "Education Choice, Endogenous Growth and Income Distribution," Working Papers 2002.03, School of Economics, La Trobe University.
  3. Galor, Oded & Zeira, Joseph, 1993. "Income Distribution and Macroeconomics," Review of Economic Studies, Wiley Blackwell, vol. 60(1), pages 35-52, January.
  4. Kaganovich, Michael & Zilcha, Itzhak, 1999. "Education, social security, and growth," Journal of Public Economics, Elsevier, vol. 71(2), pages 289-309, February.
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