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1-s2.0-s0047272715001681-main
Journal article

Does expansion of higher education lead to trickle-down growth?

BP2-STS

  • 2015
Published in:
  • Journal of Public Economics. - Elsevier BV. - 2015, vol. 132, p. 79-94
Directed technological change
Publicly financed education
Redistributive transfers
Transitional dynamics
Trickle-down growth
English The paper revisits the debate on trickle-down growth in view of the widely discussed changes in the distribution of earnings and income that followed a massive expansion of higher education. We propose a dynamic general equilibrium model to dynamically evaluate whether economic growth triggered by an increase in public education expenditure on behalf of those with high learning ability eventually trickles down to low-ability workers and serves them better than redistribution through labor income taxation or education policies targeted to the low-skilled. Our results suggest that promoting higher education implies that low-skilled workers first lose in terms of consumption and income but eventually gain. Policies that aim at expanding the skills of low-ability workers make them better off only moderately because of adverse general equilibrium effects. Low-ability workers typically benefit most from redistribution.
Faculty
Faculté des sciences économiques et sociales et du management
Department
Département d'économie politique
Language
  • English
Classification
Economics
License
Rights reserved
Open access status
green
Identifiers
Persistent URL
https://folia.unifr.ch/unifr/documents/322927
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