Redistribution Through Education and Other Mechanisms Under. Capital-Market Imperfections and Uncertainty: A Welfare Effect Analysis
Mohamed Ben Mimoun ()
Cahiers de la Maison des Sciences Economiques from Université Panthéon-Sorbonne (Paris 1)
This paper considers a two-period model of endogenous human capital formation under the credits-market imperfection and uncertainty assumptions. We compare in the first part of the paper ex-ante and ex-post general-equilibrium effects of the education subsidy policy to those of the negative income tax and the unskilled wage subsidy regimes. We show that the education subsidy policy raises an efficiency-inequality trade-off issue, and therefore it is optimal unless the degree of inequality aversion is relatively high and financing the subsidy is not too distorsive. Public loans are often claimed to provide a solution for such issue. We explore the implications of implementing the public loan under several schemes in the second part of the paper. We show that combining between a pure public loan and education subsidies provides higher welfare levels than these two policies taken separately provided that the inequality aversion degree is high. For low degrees of inequality aversion, the pure public loan is the optimal policy
Keywords: Congestion; clubs; equilibrium (search for similar items in EconPapers)
JEL-codes: C62 D71 H41 (search for similar items in EconPapers)
Pages: 33 pages
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Journal Article: Redistribution Through Education and Other Mechanisms Under Capital‐Market Imperfections and Uncertainty: A Welfare Effect Analysis (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:mse:wpsorb:bla04110
Access Statistics for this paper
More papers in Cahiers de la Maison des Sciences Economiques from Université Panthéon-Sorbonne (Paris 1) Contact information at EDIRC.
Bibliographic data for series maintained by Lucie Label ().