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Education arms race, fertility rate and education inflation

Author

Listed:
  • Weiguang Liu

    (Nagoya University)

Abstract

There are many reasons behind the education inflation. I tried to explain it in two aspects. First, every individual family has an incentive to occupy a higher status in the education hierarchy for honor, which means there is a zero-sum education arms race game. Second, the low fertility rate intensifies the education arms race because it deprives parents of other options. The extreme case is China's one-child policy. I built a behavioral economic model based on Veblen's basic thoughts to explained how these two factors intertwine with each other and contribute to education inflation.

Suggested Citation

  • Weiguang Liu, 2019. "Education arms race, fertility rate and education inflation," Economics Bulletin, AccessEcon, vol. 39(2), pages 937-946.
    • Handle: RePEc:ebl:ecbull:eb-18-00623
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2019/Volume39/EB-19-V39-I2-P90.pdf
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    References listed on IDEAS

    as
    1. Michael Spence, 2002. "Signaling in Retrospect and the Informational Structure of Markets," American Economic Review, American Economic Association, vol. 92(3), pages 434-459, June.
    2. William A. Brock & Steven N. Durlauf, 2002. "A Multinomial-Choice Model of Neighborhood Effects," American Economic Review, American Economic Association, vol. 92(2), pages 298-303, May.
    3. Nancy Qian, 2009. "Quantity-Quality and the One Child Policy:The Only-Child Disadvantage in School Enrollment in Rural China," NBER Working Papers 14973, National Bureau of Economic Research, Inc.
    4. Patrizia Ordine & Giuseppe Rose, 2017. "Too Many Graduates? A Matching Theory of Educational Mismatch," Journal of Human Capital, University of Chicago Press, vol. 11(4), pages 423-446.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Wei Yang & Michael Veall, 2020. "Living with the In-laws in China: Which Way is the Spousal Transfer?," Economics Bulletin, AccessEcon, vol. 40(4), pages 3147-3152.

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    More about this item

    Keywords

    education arms race; fertility rate; education inflation;
    All these keywords.

    JEL classification:

    • I2 - Health, Education, and Welfare - - Education
    • D1 - Microeconomics - - Household Behavior

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