Hostname: page-component-848d4c4894-m9kch Total loading time: 0 Render date: 2024-05-26T09:27:42.126Z Has data issue: false hasContentIssue false
  • English
  • Français

EVOLUTION OF THE INCOME DISTRIBUTION AND EDUCATION VOUCHERS

Published online by Cambridge University Press:  06 April 2004

ELIZABETH M. CAUCUTT
ELIZABETH M. CAUCUTT
Affiliation:
University of Rochester
Get access Rights & Permissions [Opens in a new window]

Abstract

In this paper, I study the effect that switching to a voucher system of educational finance has on the distribution of income. The model is calibrated to U.S. data, and simulated for two different forms of education finance: a voucher system and a completely private system of schools. All voucher policies considered result in welfare gains and reductions in income inequality. A private system entails a welfare loss and an increase in income inequality. The more important the peer group is to future income, the smaller the welfare gains and reductions in inequality associated with voucher systems, and the greater the welfare cost and increase in inequality associated with a private system.

Keywords

EducationVouchersPeer EffectsIncome Distribution
Type
Research Article
Information
Macroeconomic Dynamics , Volume 8 , Issue 2 , April 2004 , pp. 226 - 249
Copyright
© 2004 Cambridge University Press

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Altonji J.G. & T.A. Dunn 1996 Using siblings to estimate the effect of school quality on wages. Review of Economics and Statistics 78, 665– 671.Google Scholar
Black S.E. 1999 Do better schools matter? Parental valuation of elementary education. Quarterly Journal of Economics 114, 577– 599.Google Scholar
Card D. & A. Krueger 1992 Does school quality matter? Returns to education and the characteristics of public schools in the United States. Journal of Political Economy 100, 1– 40.Google Scholar
Card D. & A. Krueger 1996 School resources and student outcomes: An overview of the literature and new evidence from North and South Carolina. Journal of Economic Perspectives 10, 31– 50.Google Scholar
Caucutt E.M. 2001 Peer group effects in applied general equilibrium. Economic Theory 17, 25– 51.Google Scholar
Caucutt E.M. 2002 Educational vouchers when there are peer effects—size matters. International Economic Review 43, 195– 222.Google Scholar
Cole H.L. & E.C. Prescott 1997 Valuation equilibria with clubs. Journal of Economic Theory 74, 19– 39.Google Scholar
Coleman J.S., E.Q. Campbell, C.J. Hobson, J. McPartland, A.M. Mood, F.D. Weinfeld & R.L. York 1966 Equality of Educational Opportunity. Washington, DC: U.S. Department of Health, Education, and Welfare, National Center for Educational Statistics.
Council of Economic Advisors 1996 Economic Report of the President. Washington, DC: U.S. Government Printing Office.
de Bartolome C.A.M. 1990 Equilibrium and inefficiency in a community model with peer group effects. Journal of Political Economy 98, 110– 133.Google Scholar
Epple D. & R.E. Romano 1998a Competition between private and public schools, vouchers and peer group effects. American Economic Review 62, 33– 62.Google Scholar
Epple D. & R.E. Romano 1998b Educational Vouchers and Cream Skimming. Manuscript, University of Florida.
Fernandez R. & R. Rogerson 1998 Public education and income distribution: A dynamic quantitative evaluation of education-finance reform. American Economic Review 88, 813– 833.Google Scholar
Friedman M. 1962 Capitalism and Freedom. Chicago: University of Chicago Presso.
Grogger J. 1996 School expenditures and post-schooling earnings: Evidence from high school and beyond. Review of Economics and Statistics 78, 628– 637.Google Scholar
Hanushek E.A. 1986 The economics of schooling. Journal of Economic Literature 24, 1141– 1177.Google Scholar
Henderson J.V., P. Mieskowski & Y. Sauvageau 1978 Peer group effects and educational production functions. Journal of Public Economics 10, 97– 106.Google Scholar
Herrnstein R.J. & C. Murray 1994 The Bell Curve. New York: The Free Press.
Korenman S. & C. Winship 2000 A reanalysis of the Bell curve: Intelligence, family background, and schooling. In K. Arrow, S. Bowles & S. Durlauf (eds.), Meritocracy and Economic Inequality. Princeton, NJ: Princeton University Press.
Nechyba T.J. 2000 Mobility, targeting, and private school vouchers. American Economic Review 90, 130– 146.Google Scholar
Solon G. 1992 Intergenerational income mobility in the United States. American Economic Review 82, 393– 408.Google Scholar
Summers A. & B. Wolfe 1977 Do schools make a difference? American Economic Review 67, 639– 652.Google Scholar