Composition of Public Education Expenditures and Human Capital Accumulation

Naito, Katsuyuki and Nishida, Keigo (2012): Composition of Public Education Expenditures and Human Capital Accumulation.

Abstract

This paper provides a simple theory to study how the allocation of public funds between primary and higher education affects human capital accumulation. The allocation is endogenously determined through majority voting. Public funding for higher education is not supported when a majority is poor. In some cases, higher education starts to be realized as a majority of individuals accumulate enough human capital through primary education. Although the emergence of higher education can accelerate aggregate human capital accumulation, it widens income inequality because the very poor are excluded from higher education and the declined budget share for primary education decreases its quality.

• Item Type: MPRA Paper
• Language: English
• Keywords: Public Education; Economic Development; Income Inequality; Majority Voting
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O11 - Macroeconomic Analyses of Economic Development; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O15 - Human Resources ; Human Development ; Income Distribution ; Migration; D - Microeconomics > D7 - Analysis of Collective Decision-Making > D72 - Political Processes: Rent-Seeking, Lobbying, Elections, Legislatures, and Voting Behavior; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O40 - General

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