Public Education for the Children Left Behind

35 Pages Posted: 22 Mar 2010

See all articles by Carmen Camacho

Carmen Camacho

Catholic University of Louvain (UCL) - Department of Economics

I-Ling Shen

Catholic University of Louvain (UCL); IZA Institute of Labor Economics

Abstract

This paper examines the role of public education in the context of parental migration, and it studies the effects of an expansive income tax policy that is adopted to increase public education expenditure per pupil. It is shown that such a policy may exacerbate income inequality in the long run if for the less skilled dynasties, the benefits of more public spending on education does not make up for the negative effects of increased parental absences. However, if the migration-induced tax base erosion is not severe, an expansive income tax policy indeed enhances future human capital for all dynasties, and moreover, it may help the less skilled households escape from the poverty trap, thus reducing long-run income inequality.

Keywords: human capital, income inequality, parental migration, public education expenditure, tax base erosion

JEL Classification: H20, H52, O15, O40

Suggested Citation

Camacho, Carmen and Shen, I-Ling, Public Education for the Children Left Behind. IZA Discussion Paper No. 4833. Available at SSRN: https://ssrn.com/abstract=1575886

Carmen Camacho (Contact Author)

Catholic University of Louvain (UCL) - Department of Economics ( email )

Department of Economics
B1348 Louvain-la-Neuve, 1348
Belgium

I-Ling Shen

Catholic University of Louvain (UCL) ( email )

Place Montesquieu, 3
Louvain-la-Neuve, 1348
Belgium

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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