A Model of Vertically Differenciated Education

M.R. Effinger and Mattias K Polborn

Working Papers from Toulouse - GREMAQ

Abstract: We analyse the allocation of students who differ in their ability to two school types when there are peer effects (students learn more the better their classmates) and expected income after school depends also on the average productivity of peers. We derive the allocation under free school choice and decentralized determination of the academic level; we show that, compared to the social optimum, the level is suboptimal and to many students attend the better school type. A social planner can improve on the allocation under free school choice by prescribing a higher academic level.

Keywords: EDUCATION; EXTERNALITIES (search for similar items in EconPapers)
JEL-codes: D62 I20 (search for similar items in EconPapers)
Pages: 15 pages
Date: 1997
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Citations: View citations in EconPapers (4)

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Journal Article: A model of vertically differentiated education (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:fth:gremaq:97.469

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