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Which education policies can prevent the collapse of the middle-income group?

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  • Nakamura, Hideki

Abstract

This study addresses the issue of widening income inequality and evaluates elementary and higher education policies. Unless education policy increases the level of elementary education more rapidly than that of higher education, it will become more difficult to prevent the collapse of the middle-income group because of the increasing price of education. This collapse of the middle-income group would subsequently decrease the levels of income for all individuals. Whereas education policy affects the levels of both elementary and higher education, elementary education policy should precede higher education policy as long as the direct effect of policy outweigh the indirect effect.

Suggested Citation

  • Nakamura, Hideki, 2015. "Which education policies can prevent the collapse of the middle-income group?," Japan and the World Economy, Elsevier, vol. 36(C), pages 1-10.
    • Handle: RePEc:eee:japwor:v:36:y:2015:i:c:p:1-10
    DOI: 10.1016/j.japwor.2015.05.001
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    References listed on IDEAS

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    1. Nakajima, Tetsuya & Nakamura, Hideki, 2012. "How Do Elementary And Higher Education Affect Human Capital Accumulation And Inequality? A Note," Macroeconomic Dynamics, Cambridge University Press, vol. 16(1), pages 151-158, February.
    2. Nakajima, Tetsuya & Nakamura, Hideki, 2009. "The price of education and inequality," Economics Letters, Elsevier, vol. 105(2), pages 183-185, November.
    3. Franciscos Koutentakis, 2012. "Public Education and Democracy in a Simple Model of Persistent Inequality," Working Papers 1204, University of Crete, Department of Economics.
    4. Rothschild, Michael & White, Lawrence J, 1995. "The Analytics of the Pricing of Higher Education and Other Services in Which the Customers Are Inputs," Journal of Political Economy, University of Chicago Press, vol. 103(3), pages 573-586, June.
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    6. Oded Galor & Omer Moav, 2006. "Das Human-Kapital: A Theory of the Demise of the Class Structure," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 73(1), pages 85-117.
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    9. Hideki Nakamura, 2013. "Wages of regular and irregular workers, the price of education, and income inequality," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 11(4), pages 517-533, December.
    10. Maoz, Yishay D. & Moav, Omer, 2004. "Social Stratification, Capital–Skill Complementarity, And The Nonmonotonic Evolution Of The Education Premium," Macroeconomic Dynamics, Cambridge University Press, vol. 8(3), pages 295-309, June.
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    More about this item

    Keywords

    Elementary education; Higher education; Education policies; Price of education; Collapse of the middle-income group;
    All these keywords.

    JEL classification:

    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • I20 - Health, Education, and Welfare - - Education - - - General
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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