Inequality, Opting-Out and Public Education Funding

29 Pages Posted: 14 Jan 2015

See all articles by Calin Arcalean

Calin Arcalean

ESADE Ramon Llull University - Department of Economics

Ioana C. Schiopu

ESADE Ramon Llull University - Department of Economics

Date Written: December 29, 2014

Abstract

We investigate the relationship between inequality and political support for public education funding in a model of endogenous fertility and school choice. Household income heterogeneity is consistent with the skewness of empirical income distributions. Inequality can drive education spending in opposite directions in poor and rich economies. A mean preserving spread increases tax rates and public school enrollment, but decreases public spending per student in low income economies, while it has opposite effects at high income levels. An increase in the average income level can also have non-monotonic effects.

Keywords: education funding, inequality, political economy

JEL Classification: D72, H42, I21, I22

Suggested Citation

Arcalean, Calin and Schiopu, Ioana C., Inequality, Opting-Out and Public Education Funding (December 29, 2014). CESifo Working Paper Series No. 5115. Available at SSRN: https://ssrn.com/abstract=2548977

Calin Arcalean

ESADE Ramon Llull University - Department of Economics ( email )

Av. de Pedralbes, 60-62
Barcelona, 08034
Spain

Ioana C. Schiopu (Contact Author)

ESADE Ramon Llull University - Department of Economics ( email )

Av. de Pedralbes, 60-62
Barcelona, 08034
Spain

HOME PAGE: http://profesores.esade.edu/ioanaschiopu

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