Shutting the stable door after the horse has bolted? : on educational risk and the quality of education

Schindler, Dirk; Weigert, Benjamin

Shutting the stable door after the horse has bolted? : on educational risk and the quality of education

Dateien

Zu diesem Dokument gibt es keine Dateien.

Datum

2011

Autor:innen

Schindler, Dirk

Weigert, Benjamin

Schriftenreihe

CESifo Working Paper;3436

URI (zitierfähiger Link)

http://nbn-resolving.de/urn:nbn:de:bsz:352-181722

Sammlungen

Wirtschaftswissenschaften

Publikationstyp

Working Paper/Technical Report

Publikationsstatus

Published

Zusammenfassung

We analyze whether a redistributive government should provide ex ante insurance against unfortunate outcomes or whether it should instead rely on transfers for redistributing income ex post. To this end, we develop a model of education in which individuals face educational risk and wage dispersion across two types of skills. Successful graduation and working as a skilled worker depends on individual effort in education and on public resources, but educational risk still causes (income) inequality. We show that in a second-best setting, in which learning effort is not observable, improving the quality of education by public funding of the educational sector has a significant effect and that this increases efficiency in comparison to a pure (linear) income tax with income transfers from skilled to unskilled workers. Compared to a first-best solution, providing ex ante insurance significantly gains importance relative to traditional ex post redistribution, because it simultaneously alleviates moral hazard in education. These results are strengthened when a (distortionary) skill-specific tax can be implemented.

Fachgebiet (DDC)

330 Wirtschaft

Schlagwörter

human capital investment, endogenous risk, learning effort, optimal taxation, public education

Zitieren

ISO 690

SCHINDLER, Dirk, Benjamin WEIGERT, 2011. Shutting the stable door after the horse has bolted? : on educational risk and the quality of education

BibTex

@techreport{Schindler2011Shutt-18172,
  year={2011},
  series={CESifo Working Paper;3436},
  title={Shutting the stable door after the horse has bolted? : on educational risk and the quality of education},
  author={Schindler, Dirk and Weigert, Benjamin}
}

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Universitätsbibliographie

Ja