IDEAS home Printed from https://ideas.repec.org/p/zbw/vfsc21/242363.html
   My bibliography  Save this paper

Allocating Collective Expenditure: The Case of Education

Author

Listed:
  • Stichnoth, Holger
  • Riedel, Lukas

Abstract

Creating distributional national accounts (DINA; e.g. Piketty, Saez, and Zucman 2018) requires the allocation of all government expenditure to individuals in order to compute their post-tax, post-transfer income. A sizeable part of government expenditure is in-kind spending, either in the form of individualized transfers (e.g., Medicare and Medicaid) or of collective consumption expenditure (e.g., education, defense, and the general legal and administrative infrastructure). Because of data limitations, the existing DINA studies allocate the collective consumption expenditure either proportionally to post-tax cash income (in which case it is distributionally neutral) or as a lump-sum transfer. In this paper we provide evidence on the way some of the collective consumption expenditure is actually distributed. We focus on public spending on education, which makes up about 5% of national income in most OECD countries. We find that, in Germany at least, education spending tends to go disproportionately to the bottom half of the post-tax cash income distribution, so the proportionality assumption adopted in the DINA literature does not work very well in the cross-section. However, this regressivity is driven by strong age effects. Moving beyond the cross-section, we find that individuals with higher lifetime earnings or better educated parents have indeed received substantially more in terms of public education spending.

Suggested Citation

  • Stichnoth, Holger & Riedel, Lukas, 2021. "Allocating Collective Expenditure: The Case of Education," VfS Annual Conference 2021 (Virtual Conference): Climate Economics 242363, Verein für Socialpolitik / German Economic Association.
  • Handle: RePEc:zbw:vfsc21:242363
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/242363/1/vfs-2021-pid-49268.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Thomas Blanchet & Lucas Chancel & Amory Gethin, 2019. "How Unequal is Europe? Evidence from Distributional National Accounts, 1980-2017," World Inequality Lab Working Papers hal-02877000, HAL.
    2. Thomas Piketty & Emmanuel Saez & Gabriel Zucman, 2018. "Distributional National Accounts: Methods and Estimates for the United States," The Quarterly Journal of Economics, Oxford University Press, vol. 133(2), pages 553-609.
    3. Timm Bönke & Giacomo Corneo & Holger Lüthen, 2015. "Lifetime Earnings Inequality in Germany," Journal of Labor Economics, University of Chicago Press, vol. 33(1), pages 171-208.
    4. Karl Widerquist, 2018. "The Bottom Line," Exploring the Basic Income Guarantee, in: A Critical Analysis of Basic Income Experiments for Researchers, Policymakers, and Citizens, chapter 0, pages 93-98, Palgrave Macmillan.
    5. Jorrit Zwijnenburg, 2019. "Unequal Distributions: EG DNA versus DINA Approach," AEA Papers and Proceedings, American Economic Association, vol. 109, pages 296-301, May.
    6. Facundo Alvaredo & Lucas Chancel & Thomas Piketty & Gabriel Zucman, 2018. "Distributional National Accounts," Post-Print halshs-03342488, HAL.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Diego Winkelried & Bruno Escobar, 2022. "Declining inequality in Latin America? Robustness checks for Peru," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 20(1), pages 223-243, March.
    2. Demetrio Guzzardi & Elisa Palagi & Andrea Roventini & Alessandro Santoro, 2022. "Reconstructing Income Inequality in Italy: New Evidence and Tax Policy Implications from Distributional National Accounts," SciencePo Working papers Main halshs-03693201, HAL.
    3. Stefan Ederer & Predrag Ćetković & Stefan Humer & Stefan Jestl & Emanuel List, 2022. "Distributional National Accounts (DINA) with Household Survey Data: Methodology and Results for European Countries," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 68(3), pages 667-688, September.
    4. Stefan Jestl & Emanuel List, 2020. "Distributional National Accounts (DINA) for Austria, 2004-2016," Working Papers halshs-03022077, HAL.
    5. Stefan Jestl & Emanuel List, 2020. "Distributional National Accounts (DINA) for Austria, 2004-2016," wiiw Working Papers 175, The Vienna Institute for International Economic Studies, wiiw.
    6. Andros Kourtellos & Kyriakos Petrou, 2021. "Trends and disparities in economic inequality in Cyprus and the EU," Cyprus Economic Policy Review, University of Cyprus, Economics Research Centre, vol. 15(1), pages 16-45, June.
    7. Stefan Jestl & Emanuel List, 2020. "Distributional National Accounts (DINA) for Austria, 2004-2016," World Inequality Lab Working Papers halshs-03022077, HAL.
    8. Lukas Riedel & Holger Stichnoth, 2022. "Government Expenditure in the DINA Framework: Allocation Methods and Consequences for Post-Tax Income Inequality," Working Papers of BETA 2022-06, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    9. Stefan Jestl & Emanuel List, 2020. "Distributional national accounts (DINA) for Austria 2004-2016," Working Paper Reihe der AK Wien - Materialien zu Wirtschaft und Gesellschaft 197, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik.
    10. Piketty, Thomas & Bozio, Antoine & Garbinti, Bertrand & Goupille-Lebret, Jonathan & Guillot, Malka, 2020. "Predistribution vs. Redistribution: Evidence from France and the U.S," CEPR Discussion Papers 15415, C.E.P.R. Discussion Papers.
    11. Thomas Blanchet & Bertrand Garbinti & Jonathan Goupille-Lebret & Clara Martínez-Toledano, 2018. "Applying Generalized Pareto Curves to Inequality Analysis," AEA Papers and Proceedings, American Economic Association, vol. 108, pages 114-118, May.
    12. Thomas Blanchet & Juliette Fournier & Thomas Piketty, 2022. "Generalized Pareto Curves: Theory and Applications," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 68(1), pages 263-288, March.
    13. Konul Amrahova Riegel, 2021. "Solving the Muni Puzzle: Who Benefits from Tax Exemption of Government Debt?," Public Finance Review, , vol. 49(1), pages 71-105, January.
    14. Aroop Chatterjee & Léo Czajka & Amory Gethin, 2020. "Estimating the Distribution of Household Wealth in South Africa," Working Papers hal-02876974, HAL.
    15. Matthew Fisher-Post, 2020. "Factor Shares in the long run," World Inequality Lab Working Papers hal-02876978, HAL.
    16. Arun Advani, 2022. "Who does and doesn't pay taxes?," Fiscal Studies, John Wiley & Sons, vol. 43(1), pages 5-22, March.
    17. Benjamin B. Lockwood & Afras Sial & Matthew Weinzierl, 2020. "Designing, Not Checking, for Policy Robustness: An Example with Optimal Taxation," NBER Chapters, in: Tax Policy and the Economy, Volume 35, pages 1-54, National Bureau of Economic Research, Inc.
    18. Bertrand Garbinti & Jonathan Goupille-Lebret & Thomas Piketty, 2017. "Income Inequality in France, 1900-2014: Evidence from Distributional National Accounts," Working Papers 201704, World Inequality Lab.
    19. Bartels, Charlotte, 2019. "Top Incomes in Germany, 1871-2014," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 79(3), pages 669-707.
    20. Rolf Aaberge & Anthony B. Atkinson & Sebastian Königs, 2018. "From classes to copulas: wages, capital, and top incomes," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 16(2), pages 295-320, June.

    More about this item

    Keywords

    inequality; redistribution; education; in-kind transfers;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:vfsc21:242363. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/vfsocea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.