Appropriation, Human Capital, and Mandatory Schooling
15 Pages Posted: 22 Aug 2001
Date Written: August 2001
Reduced inequality in human capital may reduce appropriation from the rich. They may therefore favor policies such as income transfers and mandatory schooling which equalize human capital. Comparing several such policies, we find that mandatory schooling leads to higher incomes for both the rich and the poor, and increases the welfare of all. Moreover, it is the optimal policy for the rich, even when they fully pay for the education.
JEL Classification: H23, I21
Suggested Citation: Suggested Citation