Optimal redistribution when educational background matters

Rey, Elena Del and Racionero, Maria del Mar 2000, Optimal redistribution when educational background matters, in Proceedings of the 29th Annual Conference of Economists; Economics 2000, Economic Society of Australia, Gold Coast, Qld., pp. 1-15.

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Title Optimal redistribution when educational background matters
Author(s) Rey, Elena Del
Racionero, Maria del Mar
Conference name Conference of Economists (29th : 2000 : Gold Coast, Qld.)
Conference location Gold Coast, Qld.
Conference dates 3-6 July 2000
Title of proceedings Proceedings of the 29th Annual Conference of Economists; Economics 2000
Publication date 2000
Start page 1
End page 15
Total pages 15 p.
Publisher Economic Society of Australia
Place of publication Gold Coast, Qld.
Keyword(s) Families -- Economic aspects -- Australia.
Education, Higher -- Australia -- Finance
Summary Higher education plays an important role in determining individuals lifetime
earnings. In turn, the decision to become educated depends to a large extent on innate ability and on family characteristics, including both family
wealth and educational background. In this paper, we abstract from family
income differences to concentrate on the effects of fiscal policies on the
decision to undertake higher education when the educational background
matters. In a dynamic framework, where successive generations are linked by educational background, we consider a government that uses both linear income taxation and a lump-sum subsidy to education. Conditions for
optimality of each policy are derived. The factors that determine the sign
and magnitude of the tax rate and the subsidy are identified and include
concerns for redistribution, efficiency and the educational externality on
future generations
Language eng
Field of Research 149999 Economics not elsewhere classified
130103 Higher Education
Socio Economic Objective 970114 Expanding Knowledge in Economics
HERDC Research category EN Other conference paper
Copyright notice ©2000, Economic Society of Australia
Persistent URL http://hdl.handle.net/10536/DRO/DU:30026386

Document type: Conference Paper
Collection: School of Accounting, Economics and Finance
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