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Ability transmission, endogenous fertility and educational subsidy

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  • Kazumasa Oguro
  • Takashi Oshio
  • Junichiro Takahata

Abstract

In this study, we attempt to investigate how educational subsidy, childcare allowance and family allowance affect economic growth and income distribution on the basis of simulation models which incorporate intergenerational ability transmission and endogenous fertility. The simulation results show that financial support for higher education can both increase economic growth and reduce income inequality, especially if the abilities of parent and child are closely correlated. In contrast with educational subsidy, raising childcare allowance or family allowance has limited impacts on growth and income inequality.

Suggested Citation

  • Kazumasa Oguro & Takashi Oshio & Junichiro Takahata, 2013. "Ability transmission, endogenous fertility and educational subsidy," Applied Economics, Taylor & Francis Journals, vol. 45(17), pages 2469-2479, June.
    • Handle: RePEc:taf:applec:45:y:2013:i:17:p:2469-2479
    DOI: 10.1080/00036846.2012.667554
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    Cited by:

    1. Kuzey Yilmaz, 2014. "On the Importance of Fertility Behavior in School Finance Policy Design," Koç University-TUSIAD Economic Research Forum Working Papers 1403, Koc University-TUSIAD Economic Research Forum.

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