The design of optimal education policies when individuals differ in inherited wealth and ability

Darío Maldonado

No 3975, Documentos de Trabajo from Universidad del Rosario

Abstract: In this paper I consider the role of optimal education policies in redistribution when individuals differ in two aspects: ability and inherited wealth. I discuss the extent to which the rules that emerge in unidimensional settings apply also in the bidimensional setting considered in this paper. The main conclusion is that, subject to some qualifications, the same type of rules that determine optimal education policies when only ability heterogeneity is considered apply to the case where both parameters of heterogeneity are considered. This rules imply a widening of the education gap between high- and low-ability individuals in second-best with respect to the first-best gap. The qualifications regard the implementation of the optimal allocation of resources to education and not on the way the optimal allocation in first- and in second-best differ.

Keywords: Optimal taxation; education; public provision; multidimensional screening (search for similar items in EconPapers)
JEL-codes: H21 H23 H52 I28 J31 (search for similar items in EconPapers)
Pages: 20
Date: 2007-07-31
New Economics Papers: this item is included in nep-edu
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http://repository.urosario.edu.co/bitstream/handle/10336/10904/3975.pdf

Related works:
Journal Article: The Design of Optimal Education Policies When Individuals Differ in Inherited Wealth and Ability (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:col:000092:003975

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