 Endogenous growth and welfare effects of education subsidies and intergenerational transfersElena Del Rey and Miguel-Angel Lopez-Garcia Economic Modelling, 2016, vol. 52, issue PB, 531-539 Abstract: We consider an overlapping generations model with endogenous growth and embrace the Two-Part Golden Rule criterion to analyze the welfare effects of intergenerational transfers and education subsidies. The results are compared with those obtained within the well-known exogenous growth framework. In both cases, pay-as-you-go social security enhances welfare if the growth rate is larger than the interest rate at the laissez-faire. However, with endogenous growth, pay-as-you-go social security may also increase welfare even if the growth rate of the economy is less than the interest rate. Education subsidies have an ambiguous impact because they simultaneously transfer resources across generations and change the relative price of investing in human capital. Overall, the paper shows the existence of important non-monotonicities associated with the welfare effects of modifying the tax parameters in an endogenous growth framework. Keywords: Endogenous growth; Human capital; Intergenerational transfers; Education policy (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:52:y:2016:i:pb:p:531-539 DOI: 10.1016/j.econmod.2015.09.033 Access Statistics for this article Economic Modelling is currently edited by S. Hall and P. Pauly More articles in Economic Modelling from Elsevier |
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