A foundation system and a state system-private-school implications on welfare and education expenditure

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    Abstract

    This paper examines the effects of two different education financing systems: a foundation system and a state system on the level and distribution of resources devoted to education in the presence of private schools. We use political economy approach where households differ in their level of income, and the central tax rate used to finance education is determined by a majority vote. Our analysis focuses on implications of allowing for a private-school option. To evaluate the importance of private schools we develop a computational model and calibrate it using USA data. The results reveal that the private school option is very important quantitatively in terms of welfare, total resources spent on education and equity.
    Original languageEnglish
    PublisherUniversity of Dundee
    Publication statusPublished - 2010

    Publication series

    NameDundee Discussion Papers in Economics
    PublisherUniversity of Dundee
    No.241
    ISSN (Print)1473-236X

    Keywords

    • Education finance reform
    • Private schools

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  • Cite this

    Kwiatkowski, A. (2010). A foundation system and a state system-private-school implications on welfare and education expenditure. (Dundee Discussion Papers in Economics; No. 241). University of Dundee.