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Ability transmission, endogenous fertility, and educational subsidy

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  • Oguro, Kazumasa
  • 小黒, 一正
  • オグロ, カズマサ
  • Oshio, Takashi
  • 小塩, 隆士
  • オシオ, タカシ
  • Takahata, Junichiro
  • 高畑, 純一郎
  • タカハタ, ジュンイチロウ

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

  • Oguro, Kazumasa & 小黒, 一正 & オグロ, カズマサ & Oshio, Takashi & 小塩, 隆士 & オシオ, タカシ & Takahata, Junichiro & 高畑, 純一郎 & タカハタ, ジュンイチロウ, 2010. "Ability transmission, endogenous fertility, and educational subsidy," PIE/CIS Discussion Paper 482, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hit:piecis:482
    Note: The original version of this paper was presented at the Investigative Meeting of RIETI Discussion Paper on April 5, 2010, This paper is part of the academic project on Economic Analysis of Intergenerational Issues: Searching for Further Development, funded by the Grant-in-Aid for Specially Promoted Research from Japan’s Ministry of Education, Culture, Sports, Science and Technology (grant number 22000001).
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    References listed on IDEAS

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    1. Hanushek, Eric A. & Leung, Charles Ka Yui & Yilmaz, Kuzey, 2003. "Redistribution through education and other transfer mechanisms," Journal of Monetary Economics, Elsevier, vol. 50(8), pages 1719-1750, November.
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    5. Eric A. Hanushek & Charles Ka Yui Leung & Kuzey Yilmaz, 2014. "Borrowing Constraints, College Aid, and Intergenerational Mobility," Journal of Human Capital, University of Chicago Press, vol. 8(1), pages 1-41.
    6. Maoz, Yishay D & Moav, Omer, 1999. "Intergenerational Mobility and the Process of Development," Economic Journal, Royal Economic Society, vol. 109(458), pages 677-697, October.
    7. Hanushek, Eric A, 1992. "The Trade-Off between Child Quantity and Quality," Journal of Political Economy, University of Chicago Press, vol. 100(1), pages 84-117, February.
    8. Han, Song & Mulligan, Casey B, 2001. "Human Capital, Heterogeneity and Estimated Degrees of Intergenerational Mobility," Economic Journal, Royal Economic Society, vol. 111(470), pages 207-243, April.
    9. David de la Croix & Matthias Doepke, 2003. "Inequality and Growth: Why Differential Fertility Matters," American Economic Review, American Economic Association, vol. 93(4), pages 1091-1113, September.
    10. Iyigun, Murat F, 1999. "Public Education and Intergenerational Economic Mobility," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(3), pages 697-710, August.
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    12. John Fender & Ping Wang, 2003. "Educational Policy in a Credit Constrained Economy with Skill Heterogeneity," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(3), pages 939-964, August.
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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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    Keywords

    Ability transmission; endogenous fertility; educational subsidy;
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