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Dynamic Political Economy of Redistribution Policy: The Role of Education Costs

  • Ryo Arawatari

    ()

    (Graduate School of Economics, Osaka University)

  • Tetsuo Ono

    ()

    (Graduate School of Economics, Osaka University)

This paper focuses on how education costs affect the political determination of redistribution policy via individual decision-making on education. For cases of high costs, there are multiple equilibria: the high-tax equilibrium featured by the minority of highly educated individuals and a large size of the government, and the low-tax equilibrium featured by the majority of highly educated individuals and a small size of the government. For cases of low costs, there is a unique equilibrium featured by the majority of highly educated individuals and a large size of the government.

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File URL: http://www2.econ.osaka-u.ac.jp/library/global/dp/0731R.pdf
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Paper provided by Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP) in its series Discussion Papers in Economics and Business with number 07-31-Rev.

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Length: 33 pages
Date of creation: Aug 2007
Date of revision: Nov 2007
Handle: RePEc:osk:wpaper:0731r
Contact details of provider: Web page: http://www.econ.osaka-u.ac.jp/
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  1. Markus Jäntti & Eva Österbacka & Oddbjörn Raaum & Tor Eriksson & Anders Björklund, 2002. "Brother correlations in earnings in Denmark, Finland, Norway and Sweden compared to the United States," Journal of Population Economics, Springer, vol. 15(4), pages 757-772.
  2. Hassler, John & Storesletten, Kjetil & Zilibotti, Fabrizio, 2003. "Democratic Public Good Provision," CEPR Discussion Papers 4044, C.E.P.R. Discussion Papers.
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