Efficiency and Equity in Public Education Expenditures

Michael Bruno
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Michael Bruno: The Maurice Falk Institute for Economic Research

Chapter 3 in The Economics of Public Services, 1977, pp 29-44 from Palgrave Macmillan

Abstract: Abstract The equilibrium distribution of schooling is studied when individuals differing in their natural endowments (n) decide on their schooling (S) on the basis of lifetime net earnings (I). The government affects the latter through the price of tuition and a given tax on earnings. The existence of positive interaction between S and n in earnings and a negative interaction on the resource-cost side makes for a strong positive correlation between the distributions ofn and S, and a regressive tuition fee under pure efficiency. Social welfare objectives will modify this relationship in the direction of a more egalitarian S and I distribution, and the trade-off is quantifiable. A tentative numerical example based on Israeli data is given at the end.

Keywords: Human Capital; Social Welfare Function; Distributional Issue; Marginal Cost Price; Inequality Aversion (search for similar items in EconPapers)
Date: 1977
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Persistent link: https://EconPapers.repec.org/RePEc:pal:intecp:978-1-349-02917-4_3

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DOI: 10.1007/978-1-349-02917-4_3

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