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Public education, intergenerational transfers, and fertility

Elena Del Rey () and Miguel-Angel Lopez-Garcia ()

Economics Letters, 2019, vol. 179, issue C, 78-82

Abstract: We consider a three overlapping generations model with physical and human capital. In the absence of credit markets to finance education investments, the government provides public education for the young that can be financed through lump-sum taxes on the middle-aged and/or the elderly. Embracing the Golden Rule criterion, we analyse the welfare effects of public provision of education, intergenerational transfers and changes in the demographic growth rate. We identify sufficient conditions for welfare improvements following marginal increases in public education expenditures, lump-sum taxes on the middle aged, and the population growth rate along a locally stable balanced growth path.

Keywords: Public education; Intergenerational transfers; Fertility; Human capital; Growth (search for similar items in EconPapers)
JEL-codes: H20 H21 H52 H55 J10 (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1016/j.econlet.2019.03.031

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