Public Education, Communities, and Vouchers
This paper examines the effects of school vouchers on public school quality in a simple two-community model with local provision of education. Individuals differ only by income and one community imposes a fixed exogenous costs on its residents. The equilibria of the model are stratified with the rich community providing better education with a lower tax rate. We show that the introduction of a simple voucher system can result in a Pareto improvement as an equilibrium phenomenon. This improvement brings higher education quality to both communities. However, the quality difference between communities is shown to increase in equilibrium.
|Date of creation:||19 Jan 1999|
|Date of revision:|
|Publication status:||Published in Quarterly Review of Economics and Finance, 43, 51-73, (2003).|
|Contact details of provider:|| Postal: Oscar Volij, Department of Economics, Ben-Gurion University, Beer-Sheva 84105, Israel|
Web page: http://volij.co.il/
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