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Inequality, Opting-out and Public Education Funding

Calin Arcalean () and Ioana Schiopu ()

No 5115, CESifo Working Paper Series from CESifo

Abstract: We investigate the relationship between inequality and political support for public education funding in a model of endogenous fertility and school choice. Household income heterogeneity is consistent with the skewness of empirical income distributions. Inequality can drive education spending in opposite directions in poor and rich economies. A mean preserving spread increases tax rates and public school enrollment, but decreases public spending per student in low income economies, while it has opposite effects at high income levels. An increase in the average income level can also have non-monotonic effects.

Keywords: education funding; inequality; political economy (search for similar items in EconPapers)
JEL-codes: D72 H42 I21 I22 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
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