School Fees and Vouchers when Quality of Education Matters

Alessandro Balestrino, Lisa Grazzini and Annalisa Luporini

Working Papers - Economics from Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa

Abstract: The aim of this paper is to analyse the role that quantity and quality of education may play in the design of public policies. In our model, education does not generate externalities nor is considered as a merit good, but educated people enjoy a premium on their incomes. Households live in two areas with different socio-economic characteristics. Altruistic parents choose both the amount and the quality of schooling they want for their children. The government is assumed to provide a composite education service which has a quantity as well as a quality dimension, and is financed mainly via taxes on the income of the parents. We investigate the effects on altruistic parents' social welfare of balanced-budget policy reforms aimed at introducing or raising i) school fees, and ii) vouchers meant to compensate the costs of attending high-quality schools. We show that in general school fees improve parents' welfare while vouchers do not. Parents' altruism is not enough to support high levels of quantity and quality of education: it is not necessarily sufficient to induce them to choose full-time education for their children, and is never sufficient for them to support the introduction of the voucher for quality.

Keywords: Education Policy; Redistributive taxation (search for similar items in EconPapers)
JEL-codes: H42 H52 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2023
New Economics Papers: this item is included in nep-edu and nep-ure
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Journal Article: School Fees and Vouchers when Quality of Education Matters (2024)
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