A Foundation System and a State System - Private-School Implications on Welfare and Education Expenditure

Andrzej Kwiatkowski

No 241, Dundee Discussion Papers in Economics from Economic Studies, University of Dundee

Abstract: This paper examines the effects of two different education financing systems: a foundation system and a state system on the level and distribution of resources devoted to education in the presence of private schools. We use political economy approach where households differ in their level of income, and the central tax rate used to finance education is determined by a majority vote. Our analysis focuses on implications of allowing for a private-school option. To evaluate the importance of private schools we develop a computational model and calibrate it using USA data. The results reveal that the private school option is very important quantitatively in terms of welfare, total resources spent on education and equity.

Keywords: Education finance reform; Private schools (search for similar items in EconPapers)
JEL-codes: H42 I22 I28 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2010-10
New Economics Papers: this item is included in nep-cmp, nep-edu, nep-lab and nep-ure
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Working Paper: A Foundation System and a State System - Private-School Implications on Welfare and Education Expenditure (2010)
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