Tsoukis, C and Tournemaine, F (2015) Public expenditures, growth and distribution in a mixed regime of education with a status motive. Journal of Public Economic Theory, 17 (5). 673 -701.

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Abstract

This paper tackles the issue of growth, distribution, and the provision of public services in a growth model with human capital accumulation where heterogeneous individuals decide whether to attend a publicly funded education regime or a privately funded one. Heterogeneity of individuals is introduced via their status‐motivation which is shown to affect their choice of education. In such a framework, we obtain an inverted‐U shaped relationship between growth and the size of the public education sector. In contrast with the general wisdom, we show that a larger public education sector is compatible with both a reduction of inequalities and an increase of long‐term growth. Although we demonstrate that in a majoritarian system all individuals agree on a lower size of the public education regime than that which maximizes growth, our analysis also highlights the tension between the direct beneficiaries and nonbeneficiaries from the public regime.

Item Type: Article
Uncontrolled Keywords: public services, education, public, private
Subjects: H Social Sciences > HJ Public Finance
L Education > L Education (General)
Divisions: Faculty of Humanities and Social Sciences > Keele Management School
Depositing User: Symplectic
Date Deposited: 29 Oct 2015 11:07
Last Modified: 24 Apr 2019 08:34
URI: http://eprints.keele.ac.uk/id/eprint/1096

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