Public education reform: Community or national funding of education?

摘要

I use a political economy model of public funding of education to evaluate the welfare implications of a move from a community- to a nation-wide funding policy. Broadening the scope of education finance has intragenerational redistribution effects as well as intergenera-tional effects. Previous studies have emphasized the intragenerational redistribution effects of moving from local to state-financed systems, while holding factor prices fixed. The model in this paper includes a social security system and allows factor prices to vary endogenously. I examine the welfare effects of broadening the scope of financing from a community- to a nation-wide system and find that there are very large welfare gains as voters "internalize" the effect of the education policy on both factor prices and social security benefits. I also focus on the intergenerational distributional effects, finding that significant welfare gains occur despite the displacement of the median voter to an older agent that cares less about children's well-being.