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Inequality, Growth and the Politics of Education and Redistribution

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  • Tetsuo Ono

    (Graduate School of Economics, Osaka University)

Abstract

This paper analyzes the political economy of public education and redistribution in an overlapping-generation model of a two-class society in which growth is driven by the accumulation of human capital. The levels of public education and lump- sum financial transfers are determined by voting, while private education which supplements public education is purchased individually. The model, which includes two-dimensional voting, demonstrates multiple steady-state political equilibria. One is an equilibrium with a high share of public education in government expenditure; the other is an equilibrium with a high share of lump-sum transfers. Numerical analysis shows empirically plausible result of growth, inequality and the composition of redistributive expenditures.

Suggested Citation

  • Tetsuo Ono, 2012. "Inequality, Growth and the Politics of Education and Redistribution," Discussion Papers in Economics and Business 12-09, Osaka University, Graduate School of Economics.
    • Handle: RePEc:osk:wpaper:1209
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Education; political economy; inequality; growth;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality

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