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The Quality of Public Education in Unequal Societies: The Role of Tax Institutions

  • Kammas, Pantelis
  • Litina, Anastasia
  • Palivos, Theodore

This paper examines the effect of income inequality on the quality of public education in the presence of weak institutions and tax evasion. Our theoretical model predicts that higher level income inequality within a country leads to lower quality of public education and that this effect is diminishing on the quality of institutions. The effect of inequality operates via two channels, namely via an impact on the resources allocated to public education and via an impact on the number of individuals participating in the public schooling scheme. Exploiting variations in the levels of inequality and governance across countries, the empirical analysis confirms the theoretical predictions.

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File URL: http://mpra.ub.uni-muenchen.de/52193/1/MPRA_paper_52193.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 52193.

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Date of creation: 13 Dec 2013
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Handle: RePEc:pra:mprapa:52193
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