Rethinking the role of government in education: Private education tuition waivers and public education

RuoPeng Wang and Shin Kimura

Economic Modelling, 2024, vol. 135, issue C

Abstract: This study evaluates the different impacts of public education and private education tuition waivers on human capital growth, fertility rates, and income inequality using an overlapping generations model with a child quality–quantity tradeoff. Numerous studies have confirmed that private (public) education facilitates higher (lower) human capital growth and lower (higher) fertility rates but widens (narrows) the income gap. We reveal that these findings only hold in the short term, while the opposite may be true in the long term. Regarding the latter, public education may eventually crowd out private education and increase the fertility rates of poor households. In addition, private educational disparity may be passed down intergenerationally and thus reinforced, increasing income inequality. Conversely, private education subsidies may reduce income inequality. Therefore, based on per capita utility, the government should improve population quantity through public education in the short term and population quality through private education subsidies in the long term.*

Keywords: Public education; Tuition waivers; Fertility; Quantitative analysis (search for similar items in EconPapers)
JEL-codes: I24 J13 J18 O4 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:135:y:2024:i:c:s0264999324000221

DOI: 10.1016/j.econmod.2024.106666

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