Intergenerational Transfer of Human Capital and Optimal Education Policy
(2006) Journal of Public Economic Theory — Vol. 8, n° 4, p. 529-545 (2006)
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- Authors
- Abstract
- We study the design of education policies (subsidies and public education) when parents' investment in education is motivated by warm-glow altruism and determines the probability that a child has a high ability. The optimal subsidy is not necessarily positive. It is determined by two conflicting terms: a Pigouvian term (warm-glow altruists do not properly account for the impact of education on future generations) and a "paternalistic" effect (the warm-glow term may not be fully included in social welfare). Finally, total crowding out of private expenditure (for one of the types) by public education may be desirable.
- Affiliations
University of Toulouse Gremaq University of Liege
Citations
Cremer, H., & Pestieau, P. (2006). Intergenerational Transfer of Human Capital and Optimal Education Policy. Journal of Public Economic Theory, 8(4), 529-545. https://doi.org/10.1111/j.1467-9779.2006.00276.x (Original work published 2006)