On the political economy of education subsidies

Raquel Fernandez, Richard Rogerson

    Research output: Contribution to journalArticle

    Abstract

    Standard models of public education provision predict an implicit transfer of resources from higher-income individuals toward lower-income individuals. Many studies have documented that public higher education involves a transfer in the reverse direction. We show that this pattern of redistribution is an equilibrium outcome in a model in which education is only partially publicly provided and individuals vote over the extent to which it is subsidized. We characterize economies in which poorer individuals are effectively excluded from obtaining an education and their tax payments help offset the cost of education obtained by others. We show that increased inequality in the income distribution makes this outcome more likely and that the efficiency implications of this exclusion depend on the wealth of the economy.

    Original languageEnglish (US)
    Pages (from-to)249-262
    Number of pages14
    JournalReview of Economic Studies
    Volume62
    Issue number2
    DOIs
    StatePublished - 1995

    Fingerprint

    Education
    Political economy
    Education subsidies
    Public education
    Resources
    Income distribution
    Payment
    Vote
    Redistribution
    Tax
    Costs
    Income
    Wealth
    Low income
    Exclusion

    ASJC Scopus subject areas

    • Economics and Econometrics

    Cite this

    On the political economy of education subsidies. / Fernandez, Raquel; Rogerson, Richard.

    In: Review of Economic Studies, Vol. 62, No. 2, 1995, p. 249-262.

    Research output: Contribution to journalArticle

    Fernandez, Raquel ; Rogerson, Richard. / On the political economy of education subsidies. In: Review of Economic Studies. 1995 ; Vol. 62, No. 2. pp. 249-262.
    @article{4a90305047ea482e9704ba17a403de95,
    title = "On the political economy of education subsidies",
    abstract = "Standard models of public education provision predict an implicit transfer of resources from higher-income individuals toward lower-income individuals. Many studies have documented that public higher education involves a transfer in the reverse direction. We show that this pattern of redistribution is an equilibrium outcome in a model in which education is only partially publicly provided and individuals vote over the extent to which it is subsidized. We characterize economies in which poorer individuals are effectively excluded from obtaining an education and their tax payments help offset the cost of education obtained by others. We show that increased inequality in the income distribution makes this outcome more likely and that the efficiency implications of this exclusion depend on the wealth of the economy.",
    author = "Raquel Fernandez and Richard Rogerson",
    year = "1995",
    doi = "10.2307/2297804",
    language = "English (US)",
    volume = "62",
    pages = "249--262",
    journal = "Review of Economic Studies",
    issn = "0034-6527",
    publisher = "Oxford University Press",
    number = "2",

    }

    TY - JOUR

    T1 - On the political economy of education subsidies

    AU - Fernandez, Raquel

    AU - Rogerson, Richard

    PY - 1995

    Y1 - 1995

    N2 - Standard models of public education provision predict an implicit transfer of resources from higher-income individuals toward lower-income individuals. Many studies have documented that public higher education involves a transfer in the reverse direction. We show that this pattern of redistribution is an equilibrium outcome in a model in which education is only partially publicly provided and individuals vote over the extent to which it is subsidized. We characterize economies in which poorer individuals are effectively excluded from obtaining an education and their tax payments help offset the cost of education obtained by others. We show that increased inequality in the income distribution makes this outcome more likely and that the efficiency implications of this exclusion depend on the wealth of the economy.

    AB - Standard models of public education provision predict an implicit transfer of resources from higher-income individuals toward lower-income individuals. Many studies have documented that public higher education involves a transfer in the reverse direction. We show that this pattern of redistribution is an equilibrium outcome in a model in which education is only partially publicly provided and individuals vote over the extent to which it is subsidized. We characterize economies in which poorer individuals are effectively excluded from obtaining an education and their tax payments help offset the cost of education obtained by others. We show that increased inequality in the income distribution makes this outcome more likely and that the efficiency implications of this exclusion depend on the wealth of the economy.

    UR - http://www.scopus.com/inward/record.url?scp=0000468633&partnerID=8YFLogxK

    UR - http://www.scopus.com/inward/citedby.url?scp=0000468633&partnerID=8YFLogxK

    U2 - 10.2307/2297804

    DO - 10.2307/2297804

    M3 - Article

    VL - 62

    SP - 249

    EP - 262

    JO - Review of Economic Studies

    JF - Review of Economic Studies

    SN - 0034-6527

    IS - 2

    ER -