The Optimal Mix of Quantity and Quality of Education

Alessandro Balestrino, Lisa Grazzini and Annalisa Luporini

Working Papers - Economics from Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa

Abstract: We study the roles of quantity and quality of public education in an OLG model in which the working adult cares for her child's education as well as for her elderly parent's consumption, and spends time providing assistance to her parent. A more educated agent has more ability, hence she earns more and provides better assistance. First, we identify the optimal quality-quantity mix that a parent chooses as a function of policy (school fees, income tax, pension). Then, we discuss in a steady-state framework the socially efficient determination of the policy tools. We find that school fees tend to reduce education quantity by boosting working time for both kids and adults, and generally favour the generation of working adults (even though they are the ones paying them), possibly at the expense of a negative impact on the well-being of the young and of the elderly. The opposite is true if education is mostly financed through the income tax. Overall quality is only moderately sensitive to changes in the policy mix.

Keywords: Education Policy; Redistributive taxation (search for similar items in EconPapers)
JEL-codes: H42 H52 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2025
New Economics Papers: this item is included in nep-age, nep-edu and nep-pbe
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Persistent link: https://EconPapers.repec.org/RePEc:frz:wpaper:wp2025_14.rdf

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