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Inequality and Education Choice

Author

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  • Tetsuo Ono

    (Graduate School of Economics, Osaka University)

  • Yuki Uchida

    (Graduate School of Economics, Osaka University)

Abstract

This study presents a two-class, successive generations model with human capi- tal accumulation and the choice to opt out of public education. The model demon- strates the mutual interaction between inequality and education choice and shows that the interaction leads to two locally stable steady-state equilibria. The exis- tence of multiple stable equilibria implies a negative correlation between inequality and enrollment in public education, which is consistent with evidence from OECD countries. This study also presents a welfare analysis using data from OECD coun- tries and shows that introducing a compulsory public education system leaves the rst generation worse off, though improves welfare for future generations of indi- viduals in a lower class. The results also suggest that the two equilibria are not Pareto-ranked.

Suggested Citation

  • Tetsuo Ono & Yuki Uchida, 2016. "Inequality and Education Choice," Discussion Papers in Economics and Business 16-17-Rev., Osaka University, Graduate School of Economics, revised Jan 2017.
    • Handle: RePEc:osk:wpaper:1617r
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    3. Simpson, Genevieve, 2017. "Network operators and the transition to decentralised electricity: An Australian socio-technical case study," Energy Policy, Elsevier, vol. 110(C), pages 422-433.

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    More about this item

    Keywords

    Public education; opting out; inequality;
    All these keywords.

    JEL classification:

    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality

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