Redistribution through Education and Other Transfer Mechanisms / Eric Hanushek, Charles Ka Yui Leung, Kuzey Yilmaz.

Format:

Book

Author/Creator:

Hanushek, Eric.

Contributor:

National Bureau of Economic Research.

Leung, Charles Ka Yui.

Yilmaz, Kuzey.

Series:

Working Paper Series (National Bureau of Economic Research) no. w8588.

NBER working paper series no. w8588

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2001.

Summary:

Educational subsidies are frequently justified as a method of altering the income distribution. It is thus natural to compare education to other tax-transfer schemes designed to achieve distributional objectives. While equity-efficiency trade-offs are frequently discussed, they are rarely explicitly treated. This paper creates a general equilibrium model of school attendance, labor supply, wage determination, and aggregate production, which is used to compare alternative redistribution devices in terms of both deadweight loss and distributional outcomes. A wage subidy generally dominates tuition subsidies in ex ante (or 'opportunity') calculations, but this reverses in ex post (or 'realized') calculations. Both are generally superior to a negative income tax. With externalities in production, however, there is an unambiguous role for governmental subsidy of education, because it both raises GDP and creates a more equal income distribution.

Notes:

Print version record

November 2001.