The effects of education externality on schooling

Koichi Fukumura

No 15-05, Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics

Abstract: This study theoretically investigates the effects of educational envy on schooling decisions. I develop a model where in workers enjoy utility from their levels of education and consumption. Moreover, worker fs utility also depends on other worker fs education levels, i.e., we assume the gkeeping up with Joneses h effect in education. The main result of this study is that such envy causes workers to make decisions on education level that differ from the decision made when envy is not considered. This result can explain the United States-Japan differences in the relationship between wages and schooling decisions. Analysis from a social planner fs perspective reveals that certain conditions on parameters can change the social preferences for the education level selected by individuals. Moreover, the model indicates that the economy may be overeducated in terms of the education for education fs sake situation.

Keywords: Education; Externality; Social preference; Multiple equilibria (search for similar items in EconPapers)
JEL-codes: E24 I21 I26 I31 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2015-04
New Economics Papers: this item is included in nep-ene, nep-env and nep-gro
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www2.econ.osaka-u.ac.jp/library/global/dp/1505.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:osk:wpaper:1505

Access Statistics for this paper

More papers in Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics Contact information at EDIRC.
Bibliographic data for series maintained by The Economic Society of Osaka University ().