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Education Vouchers, Growth and Income Inequality

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  • Buly A Cardak

    (Department of Economics and Finance, La Trobe University)

Abstract

This paper studies a growth model with public and private education alternatives. The impact of education vouchers for economic growth and the evolution of income inequality are considered. Results indicate that introducing education vouchers can increase economic growth. Households switching from public to private education experience higher incomes. This raises the tax base, in turn raising public education expenditures and growth of the whole economy. Vouchers are found to generally in- crease income inequality. Welfare comparisons show that voucher schemes may in some cases gain majority support, depending on assumptions and parameters. The results add a new dimension on which vouchers can be evaluated in the continuing policy debate.

Suggested Citation

  • Buly A Cardak, 2004. "Education Vouchers, Growth and Income Inequality," Working Papers 2004.03, School of Economics, La Trobe University.
    • Handle: RePEc:ltr:wpaper:2004.03
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    References listed on IDEAS

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    19. repec:bla:econom:v:71:y:2004:i::p:57-81 is not listed on IDEAS
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    Cited by:

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    3. C. Fan & Jie Zhang, 2013. "Differential fertility and intergenerational mobility under private versus public education," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(3), pages 907-941, July.
    4. Nikos Benos, 2005. "Education Systems, Growth and Welfare," University of Cyprus Working Papers in Economics 5-2005, University of Cyprus Department of Economics.
    5. Salwa Trabelsi, 2017. "Mixed, Private And Public Educational Financing Regimes, Economic Growth And Income Inequality," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 62(212), pages 43-62, January -.

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    More about this item

    Keywords

    Education Choice; Growth; Income Distribution; Vouchers EDIRC Provider-Institution: RePEc:edi:smlatau;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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