Education Choice, Endogenous Growth and Income Distribution

Author: Cardak, Buly A.

Source: Economica, Volume 71, Number 1, February 2004 , pp. 57-81(25)

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Abstract:

This paper studies an economy where parents can choose between public or private schools and can vote on taxes used to fund public schools. The model is calibrated to US data and studied using simulations. A bimodal income distribution emerges where public education students converge to a low-income equilibrium while private education students experience endogenous growth with higher incomes. However, public education students experience long-run growth through a spillover from private education students. Possible problems with the existence of a private alternative to pubic education, such as the emergence of a education-based class structure, are identified.

Document Type: Research article

DOI: http://dx.doi.org/10.1111/j.0013-0427.2004.00357.x

Affiliations: 1: La Trobe University, Victoria, Australia

Publication date: 2004-02-01