Inequality, Growth and the Politics of Education and Redistribution

Tetsuo Ono

No 12-09, Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics

Abstract: This paper analyzes the political economy of public education and redistribution in an overlapping-generation model of a two-class society in which growth is driven by the accumulation of human capital. The levels of public education and lump- sum financial transfers are determined by voting, while private education which supplements public education is purchased individually. The model, which includes two-dimensional voting, demonstrates multiple steady-state political equilibria. One is an equilibrium with a high share of public education in government expenditure; the other is an equilibrium with a high share of lump-sum transfers. Numerical analysis shows empirically plausible result of growth, inequality and the composition of redistributive expenditures.

Keywords: Education; political economy; inequality; growth (search for similar items in EconPapers)
JEL-codes: D72 D91 I24 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2012-05
New Economics Papers: this item is included in nep-dge, nep-fdg, nep-pbe and nep-pol
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Persistent link: https://EconPapers.repec.org/RePEc:osk:wpaper:1209

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