Education Vouchers, Growth and Income Inequality
This paper uses a growth model with public and private education alternatives to investigate the implications of education voucher for economic growth and the evolution of income inequality. The results indicate that introducing education vouchers can increase economic growth. families that switch from public to private education due to vouchers experience higher incomes, leading to growth in the tax base which in turn raises public education expenditures and increases the growth of the whole economy. Vouchers have an ambiguous effect on income inequality. Gini coefficients indicate increasing inequality while other measures indicate decreased inequality. Comparing income distributions using generalised Lorenz curves, the distribution under a voucher scheme dominates the distribution without voucher. This implies that in the long run, vouchers offer a welfare improvement. In short run welfare comparisons however, more than half the population is worse off with vouchers, which is consistent with the repeated failures if voucher referenda in the US. The results add a new dimension on which vouchers can be evaluated in the continuing policy debate.
|Date of creation:||2001|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.latrobe.edu.au/economics|
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Zvi Eckstein & Itzhak Zilcha, 1991.
"The Effects of Compulsory Schooling on Growth, Income Distribution and Welfare,"
Boston University - Institute for Economic Development
20, Boston University, Institute for Economic Development.
- Eckstein, Zvi & Zilcha, Itzhak, 1994. "The effects of compulsory schooling on growth, income distribution and welfare," Journal of Public Economics, Elsevier, vol. 54(3), pages 339-359, July.
- Eckstein, Z. & Zilcha, I., 1991. "The Effects of Compulsury Schooling on Growth Income Distribution and Welfare," Papers 38-91, Tel Aviv.
- Epple, Dennis & Romano, Richard E, 1998. "Competition between Private and Public Schools, Vouchers, and Peer-Group Effects," American Economic Review, American Economic Association, vol. 88(1), pages 33-62, March.
- Lee A. Lillard, 1975.
"Inequality: Earnings vs. Human Wealth,"
NBER Working Papers
0080, National Bureau of Economic Research, Inc.
- Cecilia Elena Rouse, 1998. "Private School Vouchers And Student Achievement: An Evaluation Of The Milwaukee Parental Choice Program," The Quarterly Journal of Economics, MIT Press, vol. 113(2), pages 553-602, May.
- Thomas J. Nechyba, 2000. "Mobility, Targeting, and Private-School Vouchers," American Economic Review, American Economic Association, vol. 90(1), pages 130-146, March.
- Buly A. Cardak, 2004.
"Education Choice, Endogenous Growth and Income Distribution,"
London School of Economics and Political Science, vol. 71, pages 57-81, 02.
- Buly A Cardak, 2002. "Education Choice, Endogenous Growth and Income Distribution," Working Papers 2002.03, School of Economics, La Trobe University.
- David Card & Alan Krueger, 1990.
"Does School Quality Matter? Returns to Education and the Characteristics of Public Schools in the United States,"
NBER Working Papers
3358, National Bureau of Economic Research, Inc.
- Card, David & Krueger, Alan B, 1992. "Does School Quality Matter? Returns to Education and the Characteristics of Public Schools in the United States," Journal of Political Economy, University of Chicago Press, vol. 100(1), pages 1-40, February.
- David Card & Alan Krueger, 1990. "Does School Quality Matter? Returns to Education and the Characteristics of Public Schools in the United States," Working Papers 645, Princeton University, Department of Economics, Industrial Relations Section..
- Kaganovich, M & Zilcha, I, 1997.
"Education, Social Security and Growth,"
1-97, Tel Aviv.
- Buly A Cardak, 2001.
"Education Vouchers, Growth and Income Inequality,"
2001.06, School of Economics, La Trobe University.
- Bearse, P. & Glomm, G. & Ravikumar, B., 1999.
"On the Political Economy of Means-Tested Education Vouchers,"
9904, Michigan State - Econometrics and Economic Theory.
- Bearse, Peter & Glomm, Gerhard & Ravikumar, B., 2000. "On the political economy of means-tested education vouchers," European Economic Review, Elsevier, vol. 44(4-6), pages 904-915, May.
- Galor, Oded & Zeira, Joseph, 1988.
"Income Distribution and Macroeconomics,"
51644, University Library of Munich, Germany, revised 01 Sep 1989.
- Gradstein, Mark & Justman, Moshe, 1997.
" Democratic Choice of an Education System: Implications for Growth and Income Distribution,"
Journal of Economic Growth,
Springer, vol. 2(2), pages 169-83, July.
- Mark Gradstein & Moshe Justman, . "Democratic Choice of an Education System: Implications for Growth and Income Distribution," CARESS Working Papres 97-05, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences.
- Galor, Oded, 1996.
"Convergence? Inferences from Theoretical Models,"
CEPR Discussion Papers
1350, C.E.P.R. Discussion Papers.
- Hoyt, William H. & Lee, Kangoh, 1998. "Educational vouchers, welfare effects, and voting," Journal of Public Economics, Elsevier, vol. 69(2), pages 211-228, June.
- Gradstein, Mark & Justman, Moshe, 2000. "Human capital, social capital, and public schooling," European Economic Review, Elsevier, vol. 44(4-6), pages 879-890, May.
- Glomm, Gerhard & Ravikumar, B, 1992. "Public versus Private Investment in Human Capital Endogenous Growth and Income Inequality," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 818-34, August.
- Cohen-Zada, Danny & Justman, Moshe, 2003. "The political economy of school choice: linking theory and evidence," Journal of Urban Economics, Elsevier, vol. 54(2), pages 277-308, September.
- 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.
- West, Edwin G, 1997. "Education Vouchers in Principle and Practice: A Survey," World Bank Research Observer, World Bank Group, vol. 12(1), pages 83-103, February.
- Gerhard Glomm & B. Ravikumar, 1998. "Flat-Rate Taxes, Government Spending on Education, and Growth," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 1(1), pages 306-325, January.
- Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
When requesting a correction, please mention this item's handle: RePEc:trb:wpaper:2001.06. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Stephen Scoglio)The email address of this maintainer does not seem to be valid anymore. Please ask Stephen Scoglio to update the entry or send us the correct address
If references are entirely missing, you can add them using this form.