The Quality of Public Education in Unequal Societies: The Role of Tax Institutions

Kammas, Pantelis and Litina, Anastasia and Palivos, Theodore (2015): The Quality of Public Education in Unequal Societies: The Role of Tax Institutions.

Abstract

This paper examines the effect of income inequality on the quality of public education in the presence of weak institutions and tax evasion. Our theoretical model predicts that higher level income inequality within a country leads to lower quality of public education and that this effect is diminishing on the quality of institutions. The effect of inequality operates via two channels, namely via an impact on the resources allocated to public education and via an impact on the number of individuals participating in the public schooling scheme. Exploiting variations in the levels of inequality and governance across countries, the empirical analysis confirms the theoretical predictions.

• Item Type: MPRA Paper
• Language: English
• Keywords: Quality of Public Education, Income Inequality, Tax Evasion.
• Subjects: D - Microeconomics > D6 - Welfare Economics > D63 - Equity, Justice, Inequality, and Other Normative Criteria and Measurement; H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H26 - Tax Evasion and Avoidance; I - Health, Education, and Welfare > I2 - Education and Research Institutions

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