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Should educational policies be regressive?

Gottlieb, Daniel and Moreira, Humberto (2012) Should educational policies be regressive? Journal of Public Economic Theory, 14 (4). 601 - 623. ISSN 1097-3923

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Identification Number: 10.1111/j.1467-9779.2012.01554.x

Abstract

In this paper, we study optimal educational policies when the ability to benefit from education is private information. We extend the framework of De Fraja (2002) in two directions. First, we replace his specification of the government's budget constraint, which prevents the government to use tax revenues from an older generation to subsidize the education of a younger generation, by the usual one. We show that the optimal educational policies achieve the first best, are not regressive, and can be decentralized through Pigouvian taxes and credit provision. Second, we consider utility functions that are not quasi-linear. In this case, we show that the first best can no longer be reached, education may not be monotonic in ability, and progressivities of education are locally welfare-improving.

Item Type: Article
Official URL: https://onlinelibrary.wiley.com/journal/14679779
Additional Information: © 2012 Wiley Periodicals, Inc
Divisions: Management
Subjects: H Social Sciences > HB Economic Theory
L Education > LB Theory and practice of education
Date Deposited: 13 Nov 2019 15:27
Last Modified: 20 Nov 2019 12:48
URI: http://eprints.lse.ac.uk/id/eprint/102524

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