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HOW LONG SHOULD WE STAY IN EDUCATION IF ABILITY IS SCREENED?
Author(s) -
Oshio Takashi,
Yasuoka Masaya
Publication year - 2009
Publication title -
metroeconomica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.256
H-Index - 29
eISSN - 1467-999X
pISSN - 0026-1386
DOI - 10.1111/j.1467-999x.2008.00350.x
Subject(s) - public education , equity (law) , drop out , economics , education policy , private education , education economics , public economics , higher education , labour economics , economic growth , demographic economics , political science , law
We examine how ability‐screening affects demand for education and the shape of an optimal education system. Explicitly incorporating gradual screening by education into the model, we illustrate how individuals of different abilities decide to stay in education or drop out. Gradual screening induces low‐ability individuals to receive over‐education, reducing the net benefit obtained from education by society as a whole, as well as such individuals. A mixed education system, in which public education is provided before private education, is superior to a wholly private system, in terms of both efficiency and equity, because it reduces the over‐education of low‐ability individuals.