Arbeitspapier
Education and Efficient Redistribution
Should education be subsidized for the purpose of redistribution? The usual argument against subsidies to education above the primary level is that the rich take up most education, so a subsidy would increase inequality. We show that there is a counteracting effect: an increase in the stock of human capital reduces the return to human capital and, therefore, pre-tax income inequality decreases. We consider a Walrasian world with perfect capital and insurance markets. Hence, in the absence of a strive for redistribution, the market generates the efficient level of investment in human capital. When there is a demand for redistribution, the general equilibrium effects on relative wages might make a subsidy to education an ingredient of a second-best optimal redistribution policy. Stimulating human capital formation results in a compression of the wage distribution, and hence reduces the need for distortionary redistributive taxation. We also study the political viability of education subsidies.
- Sprache
-
Englisch
- Erschienen in
-
Series: CESifo Working Paper ; No. 592
- Klassifikation
-
Wirtschaft
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Dur, Robert A. J.
Teulings, Coenraad N.
- Ereignis
-
Veröffentlichung
- (wer)
-
Center for Economic Studies and ifo Institute (CESifo)
- (wo)
-
Munich
- (wann)
-
2001
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:42 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Dur, Robert A. J.
- Teulings, Coenraad N.
- Center for Economic Studies and ifo Institute (CESifo)
Entstanden
- 2001
Ähnliche Objekte (12)
Education and Efficient Redistribution
Higher Education Financing and Income Redistribution
Efficient Redistribution in Agricultural Commodity Markets
Hidden Redistribution in Higher Education
Redistribution and Education Subsidies are Siamese Twins
Efficient redistribution: Comparing basic income with unemployment benefit
Efficient redistribution: comparing basic income with unemployment benefits
Globalization, redistribution, and the composition of public education expenditures
Education, Growth, and Redistribution in the Presence of Capital Flight
(Re-)Distribution of Personal Incomes, Education and Economic Performance Across Countries
(Re)Distribution of personal incomes, education and economic performances across countries
(Re-)Distribution of Personal Incomes, Education and Economic Performance across Countries
Education and Efficient Redistribution
Higher Education Financing and Income Redistribution
Efficient Redistribution in Agricultural Commodity Markets
Hidden Redistribution in Higher Education
Redistribution and Education Subsidies are Siamese Twins
Efficient redistribution: Comparing basic income with unemployment benefit
Efficient redistribution: comparing basic income with unemployment benefits
Globalization, redistribution, and the composition of public education expenditures
Education, Growth, and Redistribution in the Presence of Capital Flight
(Re-)Distribution of Personal Incomes, Education and Economic Performance Across Countries
(Re)Distribution of personal incomes, education and economic performances across countries
(Re-)Distribution of Personal Incomes, Education and Economic Performance across Countries
Education and Efficient Redistribution
Higher Education Financing and Income Redistribution
Efficient Redistribution in Agricultural Commodity Markets
Hidden Redistribution in Higher Education
Redistribution and Education Subsidies are Siamese Twins
Efficient redistribution: Comparing basic income with unemployment benefit
Efficient redistribution: comparing basic income with unemployment benefits
Globalization, redistribution, and the composition of public education expenditures
Education, Growth, and Redistribution in the Presence of Capital Flight
(Re-)Distribution of Personal Incomes, Education and Economic Performance Across Countries
(Re)Distribution of personal incomes, education and economic performances across countries