NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Income Distribution, Communities and the Quality of Public Education: A Policy Analysis

Raquel Fernandez, Richard Rogerson

NBER Working Paper No. 4158
Issued in September 1992
NBER Program(s):   PE

This paper analyzes within the context of a multicommunity model the effects of several policies that affect the financing of public education. The key features of the model are: (I) individuals differ with respect to income, (ii) individuals choose in which community to reside, (iii) communities are characterized by a proportional tax on income and a quality of public education, and (iv) a community's tax rate is chosen by majority vote. We examine three types of policies: subsidies for residency of specific income groups in particular communities, ceilings or floors on community level educational spending, and income redistribution. In each case we examine the consequences of these policies for both welfare and the quality of education across communities. We identify several policies which make all individuals better off and increase the quality of education in all communities.

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Document Object Identifier (DOI): 10.3386/w4158

Published: Quarterly Journal of Economics, 1996, pp.135-164

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