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A Model of Public Education and Income Inequality with a Subsistence Constraint
Author(s) -
Sylwester Kevin
Publication year - 2002
Publication title -
southern economic journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.762
H-Index - 58
eISSN - 2325-8012
pISSN - 0038-4038
DOI - 10.1002/j.2325-8012.2002.tb00482.x
Subject(s) - poverty trap , economics , poverty , human capital , inequality , public education , economic inequality , subsistence agriculture , constraint (computer aided design) , income distribution , attendance , time allocation , trap (plumbing) , labour economics , economic growth , mechanical engineering , mathematical analysis , ecology , mathematics , management , engineering , biology , agriculture , environmental engineering
This paper constructs a model in which incomes do not necessarily converge under a public education system. School attendance creates an opportunity cost of foregone income that poorer agents might need. These poorer agents, unlike high‐income agents, allocate less time to schooling and so are less able to increase their human capital. However, some agents in a poverty trap might actually have higher income, at least temporarily, than do agents who do not fall into this trap. The model also shows why better public education systems can lead to more income inequality and why a gradual allocation of resources to public education may prove more beneficial than a sudden, large shift of resources.