The Parental Choice of Education: Income Inequality and Endogenous Growth

Abstract

In this paper, I modify the model of Glomm and Ravikumar ( 1992) and extend their work. In particular, I examine the link between income growth and inequality in a setting in which public and private education can coexist. In this setting, households are free to opt out of public education in favor of a private alternative. Majority voting determines the level offunding for public education. I find that income inequality declines over time under the mixed public/private regime and that, in the long run, a balanced growth path can exist. (011; 040; 120)