Income Distribution, Communities and the Quality of Public Education: A Policy Analysis

Raquel Fernandez and Richard Rogerson

No 4158, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper analyzes within the context of a multicommunity model the effects of several policies that affect the financing of public education. The key features of the model are: (I) individuals differ with respect to income, (ii) individuals choose in which community to reside, (iii) communities are characterized by a proportional tax on income and a quality of public education, and (iv) a community's tax rate is chosen by majority vote. We examine three types of policies: subsidies for residency of specific income groups in particular communities, ceilings or floors on community level educational spending, and income redistribution. In each case we examine the consequences of these policies for both welfare and the quality of education across communities. We identify several policies which make all individuals better off and increase the quality of education in all communities.

Date: 1992-09
Note: PE
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Published as Quarterly Journal of Economics, 1996, pp.135-164

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Working Paper: Income Distribution, Communities and the Quality of Public Education: A Policy Analysis (1992)
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