Hostname: page-component-78c5997874-lj6df Total loading time: 0 Render date: 2024-11-15T17:27:36.073Z Has data issue: false hasContentIssue false
  • English
  • Français

The distributional effects of education expenditures

Published online by Cambridge University Press:  26 March 2020

Michael L. Biggs  and
Jayasri Dutta
Get access Rights & Permissions [Opens in a new window]

Abstract

We evaluate the long-run distributional effects of cuts in the public expenditure on education. The article simulates a dynamic model of the earnings distribution. Earnings of individuals differ because of differences in innate ability, and additionally if their education levels differ. We model a dual system of education as in the UK or US, where the state finances public education by taxation. Parents may choose to educate their children privately by spending more. Using parameter values estimated by other researchers for the UK, we evaluate the likely long-run impact of changes to education expenditures. These estimates suggest that the long-run impact of modest changes to public education expenditures on the inequality of earnings are likely to be substantial.

Type
Articles
Information
National Institute Economic Review , Volume 169 , July 1999 , pp. 68 - 77
Copyright
Copyright © 1999 National Institute of Economic and Social Research

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

We would like to thank Brenda Jennison for suggestions.

References

Atkinson, A.B. (1997), ‘Bringing income distribution in from the cold’, Economic Journal, 107, pp. 297–321.CrossRefGoogle Scholar
Barro, R.J. (1997), The Determinants of Economic Growth: Lionel Robbins Lectures, Cambridge, Mass. and London, MIT Press.Google Scholar
Benabou, R. (1996), ‘Inequality and growth’, NBER Macroeconomics Annual.Google Scholar
Chiu, W.H. (1998), ‘Income inequality, human capital acquisition, and economic performance’, Economic Journal, 108, pp. 44–59.CrossRefGoogle Scholar
Dearden, L. (1998), ‘Ability, families, education, and earnings in Britain’, Working paper no. W98, London, Institute of Fiscal Studies, UCL.CrossRefGoogle Scholar
Dearden, L., Machin, S. and Reed, H. (1997), ‘Intergenerational mobility in Britain’, Economic Journal, 107, pp. 47–66.CrossRefGoogle Scholar
Galor, O. and Zeira, J. (1993), ‘Income distribution and macroeconomics’, Review of Economic Studies, 60, pp. 35–52.CrossRefGoogle Scholar
Glomm, G. and Ravikumar, B. (1992), ‘Public and private investment in education: endogenous growth and income inequality’, Journal of Political Economy.Google Scholar
Gosling, A., Machin, S. and Meghir, C. (1996), ‘What has happened to the wages of men since 1966 ?’ in Hills, J. (ed.), New Inequalities, Cambridge, Cambridge University Press.CrossRefGoogle Scholar
Judson, R. (1998), ‘Economic growth and investment in education’, Journal of Economic Growth, 3, December.CrossRefGoogle Scholar
Loury, G.C. (1981), ‘Intergenerational transfers and the distribution of earnings’, Econometrica, 49, pp. 843–67.CrossRefGoogle Scholar
Mankiw, G., Romer, D. and Weil, D. (1992), ‘A contribution to the empirics of economic growth’, Quarterly Journal of Economics, 107, pp. 407–37.CrossRefGoogle Scholar
Psacharopoulos, G. and Layard, R. (1979), ‘Human capital and earnings: British evidence and a critique’, Review of Economic Studies, 46, Part 3, pp. 485–503.CrossRefGoogle Scholar
Meade, J. (1973), ‘The inheritance of inequalities: some biological, demographic, social, and economic factors’, Proceedings of the British Academy, 59, pp. 355–81.Google Scholar
Weale, M.R. (1994), ‘The benefits of higher education’, Oxford Review of Economic Policy, 8, pp. 35–47.CrossRefGoogle Scholar