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Local Public Education and Childless Voting: The Arising of an “Ends with the Middle” Coalition

Berardino Cesi ()

The IUP Journal of Public Finance, 2010, vol. VIII, issue 1 & 2, 74-102

Abstract: It is shown that local provision of public education increases the human capital of school-age children and the value of the housing. The second effect, called capitalization, means that the higher the expenditure in local public education, the higher the value of the housings. In a two-community model, we show that when capitalization is sufficiently strong, the marginal benefit from the higher tax, capitalized into the housing price, allows childless households to vote for a positive tax. In particular, low income childless households vote for a tax raise when capitalization is strong, whereas high income childless supports a higher tax when capitalization is weak. The median income voter is never pivotal because “ends with the middle” coalitions arise; high income households (with and without a child) make coalition with middle income class with a child, whereas low income households (with and without a child) make coalition with childless middle income class. We find that the income of the childless median voter is higher than the median income, whereas the median voter with a child has income lower than the median. Thus, the equilibrium tax preferred by the median voter (childless or not), is higher than the tax preferred by the childless median income voter and lower than the tax preferred by the median income voter with a child. This result implies that it is not possible to exclude voting equilibria in which the tax of the childless median voter is higher than the tax of the median voter with a child. When capitalization disappears, only households with a child vote for a positive tax, coalitions among the voters with and without a child arise to block public provision of local education.

Date: 2010
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