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Education Choice, Endogenous Growth and Income Distribution
Author(s) -
Cardak Buly A.
Publication year - 2004
Publication title -
economica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.532
H-Index - 65
eISSN - 1468-0335
pISSN - 0013-0427
DOI - 10.1111/j.0013-0427.2004.00357.x
Subject(s) - spillover effect , private education , economics , distribution (mathematics) , public education , income distribution , endogenous growth theory , public economics , class (philosophy) , labour economics , general equilibrium theory , higher education , inequality , economic growth , microeconomics , human capital , mathematical analysis , mathematics , artificial intelligence , computer science
This paper studies an economy where parents can choose between public or private schools and can vote on taxes used to fund public schools. The model is calibrated to US data and studied using simulations. A bimodal income distribution emerges where public education students converge to a low‐income equilibrium while private education students experience endogenous growth with higher incomes. However, public education students experience long‐run growth through a spillover from private education students. Possible problems with the existence of a private alternative to pubic education, such as the emergence of a education‐based class structure, are identified.