TY - JOUR
TI - Education, distributive justice, and adverse selection
T2 - Journal of Public Economics
IS - 1
KW - adverse selection
KW - education planning
KW - inequality
KW - schooling expenditure
AB - Abstract Autors consider a model of education planning in an economy
in which agents differ in their costs of acquiring education. The
agents' cost parameter, called `talent', is not observed. The
principal is endowed with a fixed sum of money, with which two types
of transfer can be made: in cash and in kind. The principal can
finance transfers in kind, called `help', by means of schooling
expenditures, which reduce the agent's education cost. The principal
seeks to maximize a social welfare function which is a CES index of
utility levels. Autors study the optimal allocation of individual
education effort, schooling expenditures (help), and cash, under
self-selection and budget constraints. Assuming first that the set of
types is finite, and that help and effort are sufficiently
substitutable, we find that individual education investment levels
are an increasing function, and help is a decreasing function of
talent. Utility levels cannot be equalized because of self-selection
constraints. More aversion for inequality unequivocally leads to more
inequality of educational achievements, and to more assistance
through redistribution. This remains true in the limit, under
strictly egalitarian preferences of the principal. The same
qualitative properties hold in the general case of a continuum of
types. Bunching at the lower end of the talent scale is a feature of
the solution for sufficiently high degrees of inequality aversion.
AU - Fleurbaey, Marc
AU - Gary-Bobo, Robert J.
AU - Maguain, Denis
UR - http://ecsocman.hse.ru/text/17307244/
PY - 2002
SP - 113-150
M2 - 113
VL - 84
SN -
N1 -
LA - EN
CY -
PB -
M3 -
LB -
VL -
ER -