Education, Corruption, and the Distribution of Income

J Econ Growth (2009)

27 Pages Posted: 9 May 2012

See all articles by Theo S. Eicher

Theo S. Eicher

University of Washington - Department of Economics

C. Garcia-Peñalosa

National Center for Scientific Research (CNRS) - GREQAM; CESifo (Center for Economic Studies and Ifo Institute)

van Yperselel Tanguy

affiliation not provided to SSRN

Date Written: 2009

Abstract

We examine how the interaction between education and corruption affects institutional reform and economic development. While corruption reduces average income and education, education increases not only output and hence potential corruption rents, but also produces more informed electorates that better monitor government actions. We find that economies with intermediate levels of education remain in a poverty trap since the level of skills creates sufficient corruption rents but not enough monitoring. Economies with low or high levels of education can escape the poverty trap, and inequality plays a key role in determining whether this occurs through a change in institutions or an expansion of education.

Suggested Citation

Eicher, Theo S. and Garcia-Penalosa, Cecilia and Tanguy, van Yperselel, Education, Corruption, and the Distribution of Income (2009). J Econ Growth (2009), Available at SSRN: https://ssrn.com/abstract=2054968

Theo S. Eicher (Contact Author)

University of Washington - Department of Economics ( email )

Box 353330
Seattle, WA 98195-3330
United States

Cecilia Garcia-Penalosa

National Center for Scientific Research (CNRS) - GREQAM ( email )

Centre de la Vieille Charité
2, rue de la Charité
Marseille, 13002
France
+33 491 140746 (Phone)
+33 491 900227 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Van Yperselel Tanguy

affiliation not provided to SSRN

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