IDEAS home Printed from https://ideas.repec.org/p/inq/inqwps/ecineq2015-356.html
   My bibliography  Save this paper

An empirical assessment of households sorting into private schooling under public education provision

Author

Listed:
  • Francesco Andreoli

    (LISER, Luxembourg)

  • Giorgia Casalone

    (University of the Eastern Piedmont, Italy)

  • Daniela Sonedda

    (University of the Eastern Piedmont, Italy)

Abstract

We estimate structural quantile treatment effects to analyze the relationship between household income and sorting into private or public education, using Italian data. Public education provision is redistributive when rich families, who contribute to its financing, find it optimal to sort out of the public system to buy the educational services in the private market. This may occur when the education quality is lower in the public compared to the private sector, meaning that households with higher income capacity face lower opportunity costs from sorting out of the public system. We exploit heterogeneity in expected tax deductions to exogenously manipulate the distribution of net of taxes income, equalized by family needs, and explore the consequences of this manipulation on various quantiles of the distribution of the amount of the educational transfers in-kind accruing to the households, valuing public education. We find that an increase in income reduces the amount of educational transfers in-kind (i) more for higher quantiles of the educational transfers in-kind, indicating that households with higher preferences for quality sort out of the public education system; (ii) more for lower quantiles of the households' income capacity, indicating that richer households receive lower transfers for a given preference quality.

Suggested Citation

  • Francesco Andreoli & Giorgia Casalone & Daniela Sonedda, 2015. "An empirical assessment of households sorting into private schooling under public education provision," Working Papers 356, ECINEQ, Society for the Study of Economic Inequality.
    • Handle: RePEc:inq:inqwps:ecineq2015-356
    as

    Download full text from publisher

    File URL: http://www.ecineq.org/milano/WP/ECINEQ2015-356.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Giuseppe Bertola & Daniele Checchi, 2013. "Who Chooses Which Private Education? Theory and International Evidence," LABOUR, CEIS, vol. 27(3), pages 249-271, September.
    2. Aaberge, Rolf & Langørgen, Audun & Mogstad, Magne & Østensen, Marit, 2008. "The Impact of Local Public Services and Geographical Cost of Living Differences on Poverty Estimates," IZA Discussion Papers 3686, Institute of Labor Economics (IZA).
    3. Ma, Lingjie & Koenker, Roger, 2006. "Quantile regression methods for recursive structural equation models," Journal of Econometrics, Elsevier, vol. 134(2), pages 471-506, October.
    4. Mathias Dewatripont & Lars Peter Hansen & Stephen Turnovsky, 2003. "Advances in Economics and Econometrics: Theory and Applications, Eighth World Congress," ULB Institutional Repository 2013/176003, ULB -- Universite Libre de Bruxelles.
    5. Aaberge, Rolf & Bhuller, Manudeep & Langørgen, Audun & Mogstad, Magne, 2010. "The distributional impact of public services when needs differ," Journal of Public Economics, Elsevier, vol. 94(9-10), pages 549-562, October.
    6. Stiglitz, J. E., 1974. "The demand for education in public and private school systems," Journal of Public Economics, Elsevier, vol. 3(4), pages 349-385, November.
    7. Daniele Checchi & Tullio Jappelli, 2002. "School choice and quality," Departmental Working Papers 2002-28, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    8. Lefranc, Arnaud & Pistolesi, Nicolas & Trannoy, Alain, 2009. "Equality of opportunity and luck: Definitions and testable conditions, with an application to income in France," Journal of Public Economics, Elsevier, vol. 93(11-12), pages 1189-1207, December.
    9. Giuseppe Bertola & Daniele Checchi & Veruska Oppedisano, 2007. "Private School Quality in Italy," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 66(3), pages 375-400, November.
    10. Janet Currie & Firouz Gahvari, 2008. "Transfers in Cash and In-Kind: Theory Meets the Data," Journal of Economic Literature, American Economic Association, vol. 46(2), pages 333-383, June.
    11. Besley, Timothy & Coate, Stephen, 1991. "Public Provision of Private Goods and the Redistribution of Income," American Economic Review, American Economic Association, vol. 81(4), pages 979-984, September.
    12. Acemoglu, Daron & Pischke, J. -S., 2001. "Changes in the wage structure, family income, and children's education," European Economic Review, Elsevier, vol. 45(4-6), pages 890-904, May.
    13. Fershtman, Chaim & Murphy, Kevin M & Weiss, Yoram, 1996. "Social Status, Education, and Growth," Journal of Political Economy, University of Chicago Press, vol. 104(1), pages 108-132, February.
    14. Rolf Aaberge & Audun Langørgen & Petter Lindgren, 2013. "The distributional impact of public services in," Discussion Papers 746, Statistics Norway, Research Department.
    15. Firouz Gahvari & Enlinson Mattos, 2007. "Conditional Cash Transfers, Public Provision of Private Goods, and Income Redistribution," American Economic Review, American Economic Association, vol. 97(1), pages 491-502, March.
    16. Blackorby, Charles & Donaldson, David, 1988. "Cash versus Kind, Self-selection, and Efficient Transfers," American Economic Review, American Economic Association, vol. 78(4), pages 691-700, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Francesco Andreoli & Giorgia Casalone & Daniela Sonedda, 2018. "Public education provision, private schooling and income redistribution," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 16(4), pages 553-582, December.
    2. Hanming Fang & Peter Norman, 2014. "Toward an efficiency rationale for the public provision of private goods," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 56(2), pages 375-408, June.
    3. Matthew Greenblatt, 2020. "In-kind transfers and home production," Review of Economics of the Household, Springer, vol. 18(4), pages 1189-1211, December.
    4. Diego Jimenez-Hernandez & Enrique Seira, 2022. "Should the government sell you goods? Evidence from the milk market in Mexico," Working Paper Series WP 2023-19, Federal Reserve Bank of Chicago.
    5. J. Amegashie & Bazoumana Ouattara & Eric Strobl, 2013. "Moral hazard and the composition of transfers: theory and evidence from cross-border transfers," Economics of Governance, Springer, vol. 14(3), pages 279-301, August.
    6. Mohammad Akbarpour & Piotr Dworczak & Scott Duke Kominers, 2024. "Redistributive Allocation Mechanisms," Journal of Political Economy, University of Chicago Press, vol. 132(6), pages 1831-1875.
    7. König, Tobias & Lausen, Tobias, 2016. "Relative consumption preferences and public provision of private goods," Discussion Papers, Research Unit: Market Behavior SP II 2016-213, WZB Berlin Social Science Center.
    8. Aaberge, Rolf & Eika, Lasse & Langørgen, Audun & Mogstad, Magne, 2019. "Local governments, in-kind transfers, and economic inequality," Journal of Public Economics, Elsevier, vol. 180(C).
    9. DECANCQ, Koen & FLEURBAEY, Marc & SCHOKKAERT, Erik, 2014. "Inequality, income, and well-being," LIDAM Discussion Papers CORE 2014018, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    10. Luca Giangregorio, 2024. "Welfare type and income inequality: an income source decomposition including in-kind benefits and cash-transfers entitlement," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 31(2), pages 367-403, April.
    11. Piotr Dworczak & Scott Duke Kominers & Mohammad Akbarpour, 2021. "Redistribution Through Markets," Econometrica, Econometric Society, vol. 89(4), pages 1665-1698, July.
    12. Sofia N. Andreou & Panos Pashardes & Nicoletta Pashourtidou, 2015. "The value of state education to consumers," University of Cyprus Working Papers in Economics 05-2015, University of Cyprus Department of Economics.
    13. Jesse M Cunha & Giacomo De Giorgi & Seema Jayachandran, 2019. "The Price Effects of Cash Versus In-Kind Transfers," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 86(1), pages 240-281.
    14. Michael Förster & Gerlinde Verbist, 2012. "Money or Kindergarten? Distributive Effects of Cash Versus In-Kind Family Transfers for Young Children," OECD Social, Employment and Migration Working Papers 135, OECD Publishing.
    15. Alessandra Michelangeli & Eugenio Peluso, 2016. "Cities and Inequality," REGION, European Regional Science Association, vol. 3, pages 47-60.
    16. Epple, Dennis & Romano, Richard E, 1996. "Public Provision of Private Goods," Journal of Political Economy, University of Chicago Press, vol. 104(1), pages 57-84, February.
    17. Barros, Ricardo Paes de & Vega, José R. Molinas & Saavedra, Jaime, 2010. "Measuring Progress Toward Basic Opportunities for All," Brazilian Review of Econometrics, Sociedade Brasileira de Econometria - SBE, vol. 30(2), December.
    18. Zohal Hessami & Silke Uebelmesser, 2016. "A political-economy perspective on social expenditures: corruption and in-kind versus cash transfers," Economics of Governance, Springer, vol. 17(1), pages 71-100, February.
    19. Francesco Figari & Alari Paulus, 2015. "The Distributional Effects of Taxes and Transfers Under Alternative Income Concepts," Public Finance Review, , vol. 43(3), pages 347-372, May.
    20. Janet Currie & Firouz Gahvari, 2008. "Transfers in Cash and In-Kind: Theory Meets the Data," Journal of Economic Literature, American Economic Association, vol. 46(2), pages 333-383, June.

    More about this item

    Keywords

    Transfer in kind; public education provision; income distribution; structural quantile treatment effects.;
    All these keywords.

    JEL classification:

    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • D30 - Microeconomics - - Distribution - - - General
    • I20 - Health, Education, and Welfare - - Education - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inq:inqwps:ecineq2015-356. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Maria Ana Lugo (email available below). General contact details of provider: https://edirc.repec.org/data/ecineea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.