Parents Investments and Education Returns

Francesc Dilme
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Francesc Dilme: Universitat de Barcelona

No 194, Working Papers in Economics from Universitat de Barcelona. Espai de Recerca en Economia

Abstract: This paper analyses the relation between parents earnings and their childrens education. In a context of perfect altruism, the model describes parents decisions on how much to consume and how much to invest in their childrens education. The model predicts that returns on education in terms of wages should be linear. Using this model in a competitive economy, we show how the outcome depends on government subsidies or taxes on education. The usual tradeoff equality-efficiency arises in this context. Finally, the model provides some insights into the relation between education and productivity.

JEL-codes: E24 I22 I28 I32 J26 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2008
New Economics Papers: this item is included in nep-edu, nep-hrm and nep-lab
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