From the public finance perspective, 96% of all resources spent for schools (from pri- mary to upper secondary) in Italy is publicly funded, and households pay the remaining 4%. Only at tertiary education level, the private component raises up to 30% due to the appli- cation of tuition fees which vary across universities and which are related to households income. 9 The central government accounts for more than 80% of public expenditures on education, while the remaining 20% is financed at local level (regions, provinces, municipal- ities). Expenditures on core services, such as teachers’ salaries, school buildings, teaching materials, books, administration of schools represent about 96% of all expenditures, slightly more than EU average (94%). Among such services, teachers’ and technical/administrative staff salaries are fixed by nationally centralized bargaining procedures, and do not vary across regions (but vary across educational levels). Remaining expenditures are on ancillary services. OECD defines ancillary services as “services provided by educational institutions that are peripheral to the main educational mission” and distinguishes among two main components: student welfare services and services for the general public. 10 The former include meals, school health services, transportation to and from schools at school level (ISCED 0-3); dormitories, dining halls and health care services at tertiary education level. Services for the general public cover for instance museums, technology projects with com- puter activities providing beginners with basic knowledge of computer fundamentals, radio and television broadcasting, sports, recreational and cultural program. In public schools day or evening childcare (at pre-primary and primary school level) is not included as an ancillary service while it is generally granted by private institutions.
Powers) and quality assurance processes should ensure these outcomes. Beyond that, whether a profit arises from providing higher education is not of public concern. The main counter-argument is that, where public funds are used to generate profits for shareholders, there are legitimate grounds for public concern and scrutiny. A second and more complex point that is sometimes made is that whereas in the case of public institutions surpluses income is re-invested fully in the educational business this is not the case with for-profit institutions; but national QA (Quality Assurance) systems will find it hard to disentangle evidence on the use of profits in multi-national or multi-mode for-profit education businesses and then to exercise any influence on how they are used. If this is a concern careful scrutiny of the evidence concerning the deployment of profits and any potential impact on students and their education would be needed. Care will also be needed in shaping a new and comprehensive regulatory framework. If an equitable and broadly comparable regulatory framework is developed for all institutions in the sector, it may need some mechanisms for monitoring surpluses and alerting a regulator where the amount given to shareholders might be considered excessive. 7
Ideally, the government would like to o¤er di¤erent bundles to the low-skilled avoiders and the low-skilled non-avoiders. To realize that this is the case, consider the following. In a standard two-type optimal nonlinear taxation model (without avoidance) the low- skilled agents face a positive marginal tax rate in order to discourage the high-skilled agents from mimicking. Now, if we introduce low-skilled avoiders and assume that they are pooled together with the low-skilled non-avoiders, we would get that the avoiders enjoy a higher utility (since they under-report part of their income whereas the other group of low-skilled agents cannot do that). Thus, under reasonable social preferences for redistribution, the government would like to transfer resources from the low-skilled avoiders to the low-skilled non-avoiders. However, Figure 1 below shows that the presence of high-skilled agents (with the associated binding self-selection constraint requiring them not to mimic low-skilled agents) prevents the government from being able to separate the two types of low-skilled agents. 26
This paper aims first of all to study the effect of education on income inequality in Turkey in a qualitative way. For this purpose, the average levels of schooling and scho- oling distribution for income quintiles will be investigated. Until recently, the decompo- sition of inequality was a relatively unexplored field in Turkey, with the exception of the spatial dimension. Duygan and Guner (2006) model fertility and education decisions to see the impact on persistence of inequality. Dayioglu and Tunali (2004) study gender dif- ferences in education and earnings. Although they do not consider the total returns, Dayi- oglu and Kasnakoglu (1997) examine the returns on education by gender. Utilizing the 1994 survey they conclude that females have higher private returns for every educatio- nal category than males. Tansel (1994), employing the 1987 Household Income and Con- sumption Expenditures Survey (HICES), computes the private rate of return on education in urban areas. She finds that the primary and secondary returns on education for males are lower than for females. And overall, the higher the education level is, the higher the returns are. To our knowledge the only other study that investigates the social returns of education in Turkey is by Turkmen (2002). According to this paper, the social return of primary education has declined from 1987 to 1994 while the return on secondary schoo- ling has remained stable. Nevertheless, none of these studies explicitly analyze the effect of educational variables or look deeper into public and private spending on education.
Columns 5 to 7 perform additional robustness checks. A first concern is that results may be biased by idiosyncratic increases in the overall demand for educa- tion in a district over time. To address this, we include an additional control for total enrolment spanning both public and private schools in each district cell, which acts as a time-varying proxy for the demand for education in the district. While the coefficient on this term is significant, it does not undermine the core result for privateschooling. A second concern is that results may be driven by outliers. Column 6 drops districts containing the largest 1% of year-on-year changes in KCPE scores or private enrolment shares – leading to a loss of seven districts. Again, the results are qualitatively unchanged, with the private-school coefficient only increasing in magnitude. A final concern is that improvements
Abstract: Government of Punjab is committed to attain the universalization of school education by providing free education and even in a number of districts the free books and through the programs of food for education. The stipends on the subsidized schooling are also part of the policy by Government of Punjab. The rapid increase in enrolment in private schools reflects the partial failure of these schemes and making the target of universalization of school education difficult. The paper examines the household choice of private versus public sector schools as an outcome of child, household and school characteristics by using logit model. Data has been collected from Bahawalpur city through stratified sampling of clusters and random sampling of households. A survey of 627 households having at least one school-going child made the data available. The study found that income of the household, education of the parents, English as medium of instruction in school and distance of public school from the household enhance the preference of private schools. To universalize the school education more public sector schools are required near to the households. The adaptation of English as medium of instruction may increase the school enrolment.
Once consensus is reached on the impact of finance reforms on student performance, is that the end of the story? In our view, the answer is no for several reasons. First, other effects of these policies may be interesting to examine in their own right. Second, studying these impacts in other areas allows us to begin to pinpoint the determinants of the observed performance changes. Third, by broadening the scope of our study of the effects of school finance reforms, we can begin to complete our understand- ing of the impact of these policy changes on the schooling experience for all children, not just for those children who remain in the public schools. This third point is particularly important, because careful understanding of the distributional consequences of a public policy change requires that the entire distribution of students be studied. To date, there have been few attempts to quantify the magnitude and the nature of the interdistrict and intersector mobility predicted in the theoretical work of Nechyba (1996, 1999), Bénabou (1996), and Fernández and Rogerson (1996, 1997, 1998). In this paper, we sum- marize some of our own recent work on school finance reforms and community and school composition, and inter- pret the school performance results in the context of these findings. In addition, we present new evidence on the effects of school finance reforms on the differential selection into public and private schools of central-city students from high-income and highly educated families.
To model privateprovision in a dynamic setting, I consider an infinitely repeated version of the static voluntary contributions game. To model publicprovision, I apply Bernheim and Slavov’s (2009) notion of a dynamic Condorcet winner (DCW), which extends the Condorcet winner concept to dynamic settings. A DCW prescribes a policy for every possible history in such a way that for any history, the prescribed policy choice is majority preferred to any other policy given the implications of the current choice for future outcomes. In contrast to the static setting, a one-parameter tax system is not required to ensure the existence of DCWs. Indeed, DCWs exist with a completely unrestricted tax system, in which each individual pays a different positive or negative tax rate. Lifting the one-parameter restriction on the tax system allows incomeredistribution to be chosen jointly with the level of the public good. 1 While the DCW concept is intuitively appealing because of its similarity to the static Condorcet concept, applying it in practice can be analytically difficult, even for very simple problems (see, e.g., Bernheim and Slavov 2004, Bernheim and Slavov 2009, Slavov 2006). Thus, an additional contribution of this paper is to demonstrate how DCWs can be found computationally, allowing one to apply it to more complex problems.
However, researches performed by other scientists (Blanden, Machin, 2004; Vawda, 2003) show that public financing of tertiary education is usually more favourable to those, who are from richer families rather than to those who are from poorer families. Considerable subsidies do not mean equal opportunities and in some cases they can determine undesirable redistribution of incomes from poor to rich ones. It is so, because the subsidies to tertiary edu- cation are financed from general taxes, whereas the benefi- ciaries (individuals, studying in tertiary education schools) have better perspectives that those, who do not study in schools of tertiary education. The subsidies are given in order to increase availability to all social layers, irrespec- tive of family’s assets. Consequently, there is an essential difference between subsidies to tertiary education and ex- penditures to secondary schools: only the ones who con- tinue studies in tertiary schools feel lower costs of tertiary education. In case if the lifelong incomes of an average taxpayer (described as discounted difference between life- long incomes and income tax minus private costs of educa- tion) are lower than the ones of a graduate of university, the subsidies, given to tertiary education using money of taxpayers mean reverse redistribution of lifelong incomes, i.e. redistribution from the poor to the wealthy (Garcia- Peñalosa, Wälde, 2000). Some scientists think that the fairer model of financing of tertiary education is harmoni- sation of fees for studies and loans to students (Psacharo- poulos, Woodhall, 1985).
Human capital theory and earning functions with empirical equations and extended form are extensively used concepts adopted for the first time by Mincer (1958) and his followers Becker (1975) and Ben-Porath (1967). Many pioneer economists including Adam-Smith, Jean Baptiste Say, Nassau William Senior, Friedrich List, Johann Heinrich von Thünen, Ernst Engell, Léon Walras, Irving Fisher and Karl Marx also valued human capital in their work (Walsh, 1935). However, the concept of human capital was less understood in economic history, this type of capital possessed by human beings were considered unrealistic due to the non-market value (Kiker, 1966). But now the trend in labor economic research changed and diverted to functional distribution of income between labor and income from the earning distribution across workers. Recently, labor economic research greatly emphasized on how workers’ productivity enhances by motivating employees for investment in human capital. Human capital is a set
the same income and they nd that a positive waiting time and/or a subsidy on private services are optimal, while in our model a subsidy on the private service is not always optimal, because a tax enhances redistribution. Blomquist and Christiansen (1995) analyze the role of the publicprovision of private goods for redistribution under asymmetric information. Since part of the redistribution is done in-kind, mimicking from high-ability to low-ability agents is less at- tractive. In their model, the social planner optimally sets the quantity/quality of the good that is publicly provided. Cremer and Gahvari (1997) consider a similar setting with no restriction on the number of consumption goods and allowing for linear commodity taxes. They characterize the conditions under which in-kind transfers help redistribution, by aecting individual consumption levels and by relaxing the incentive compatibility constraints. Dierently from these papers, we consider a framework where the quality of public health care depends on the number of public patients. Redistribution concerns may lead the social planner to increase congestion in the public sector in order to avoid mimicking. Furthermore, we allow for a continuum of types. Finally, Boadway and Marchand (1995) study the optimality of uniform publicprovision on re- distributive grounds but allow agents to supplement public expenditures with privateprovision. We focus on the case in which agents can consume at most one unit of the good and have to choose between the public system and private health insurance.
related preventive services or disease control and vaccination/immunisation programs. Where needs are likely to go unmet because of market failure, there is a role for the government to step in. When the social benefits of services exceed the private benefits, there is likely to be sub-optimal provision and this often calls for government provision. As one example, people typically contract sexually-transmitted diseases (STDs) accidentally. By bearing some of the cost of detecting and treating STDs, governments confer benefits not just on the individuals treated, but also on those who may otherwise be at risk of infection. The same can be told about vaccination programs and other forms of diseases control. Another example of market failure in developing countries is the education of girls. Many families fail to see any benefit from sending girls to school or are averse to give up the household labour, or income, they make available. However, as a social investment, girls’ education is crucial because it is associated with improved opportunities for them to live longer, richer, and more rewarding lives — and with better health and social outcomes for their children. Thus, by encouraging the education of girls, through educational scholarships or consciousness-raising campaigns, governments can benefit both girls themselves as well as their families and communities. This example may be extended to the health sector, as the welfare of infants depends heavily on the health status of the mother. For goods of type C market failures mainly relates to the existence of co-ordination malfunctions induced by scale economies. There is the case of external economies that arise when a new highway is built or as the size of a telecommunication service increases. The market failure is that at a given point in time, current prices may not convey the information about prospective expansion that is relevant to attaining a lower cost of production (Scitovsky, 1954; Chenery, 1960).
In 1999, regular public schools near concession schools had, on average, fewer resources than other public schools. For instance, the number of computers in schools near concession schools was only 17, whereas it was 25 in schools in other parts of the city. Also, the absolute numbers of teachers, administrative personnel, physicians and psychologists were lower in regular public schools near concession schools. The educational attainment of teachers in 1999, measured as the proportion of teachers with secondary studies to those with college or graduate studies, was very similar across the two school types. Finally, regular public schools near concession schools had, on average, 24 students per teacher, compared to 26 students per teacher in the rest of the public system. In sum, there is evidence that regular public schools near concession schools were smaller and poorer than the rest of the public system, although the quality of the teachers was similar. Given that concession schools are located in low-income areas, these differences are not surprising and it is likely that any result based on an unmatched sample will be biased.
Whichever set of subjective beliefs and perceptions individuals hold, it constitutes economic ide- ology about the proper role of government providing goods and services. These ideologies translate into heterogeneous policy preferences over the resources that governments must devote to …nance the publicprovision of goods. Besides the ideological con‡ict on the extent of government provi- sion of goods, there emerges con‡ict of interest to decide who bear the cost of funding these goods. Indeed, it is not possible to ignore the level of publicprovision of goods in the analysis of the e¤ect of taxation schedules on the private well-being of citizens. Citizens care about their own economic well-being and therefore support taxation policies that redistribute income towards them. Thus, examining the ideological con‡ict on the economic role of government also requires to consider the distributive con‡ict generated by the possibility of incomeredistribution. This paper presents a theoretical model to examine how representative democracies make redistributive and allocation policy decisions in the presence of these con‡icts of interests.
lead –ceteris paribus- to a larger proportion of households choosing to consume the publicly- provided variety (than in the perfectly competitive case) because the monopolist charges a price larger than cost. This implies that the median voter expects that any given rise in the tax rate (which increases the sum available for redistribution) will add a smaller number of households to those already consuming the publicly-provided variety ( Q G ) in the monopoly case, since the income distribution is thinning at its tails. Consequently, the median voter will be expecting a larger rise in Q G than the increase in government revenue effects in the monopoly case, and thus she will be willing to vote for a higher tax rate than in the competitive case. One can also note that as inequality decreases (parameter α rises) the impact of inequality on the tax rate becomes similar in the monopoly and perfectly
This study has contributed to the small but growing international literature on the effectiveness of school choice. It was shown that private school choice can have an impact, while at the same time contributing to overall high levels of achievement and equity. Also, the Dutch education system exhibits a strong central education policy role but decentralized school management. While private schools have a positive impact, public schools also perform very well and all schools are associated with high levels of autonomy – for example, ability to fire teachers, setting of teacher salary increases, using achievement data, allowing parental participation – at the school level. Thus, central government control and school choice in a predominantly privateschooling environment is possible, and evidently beneficial in terms of academic achievement. Dutch students perform exceptionally well on international academic achievement tests, whether they are enrolled in public or private schools. Thus, a large school choice system can promote efficiency and equity without necessarily leading to privatization or to reduced public scrutiny – school choice led to heightened demands for information, prompting the education Inspectorate to promote the use of school report cards and wide dissemination of school results.
State characteristics also play an important role in the location of private schools in a village. In particular, the likelihood of private school presence is significantly lower in states with higher per capita income, something, which was also observed by Muralidharan and Kremer (2006). This last result may require further explanation. In an attempt to explore this, we compare the average village, school and other household characteristics among the sample states (see Table 3). Clearly both enrolment rates and pupil-teacher ratios (PTR) are significantly lower in the more affluent state HP compared to the other four PROBE states. Prevalence rate of private schools in HP is less than half than that in UP 20 and it continued to be so in 2003. Thus one possible explanation of the inverse relationship between state prosperity and rise of private schools could be that the more prosperous states tend to have less pressure on the state-run schools (as reflected in lower enrolment and PTR for example) so that these state schools tend to perform better than their counterparts in the worse off (and more populous) states. The latter could be driven by both demand (e.g., related to lower fertility rates) and/or supply side (e.g., allocation of more teachers/resources to the state schools in better off states) factors.
This diverse array of debate around privateschooling highlights the need for further investigation and the development of the field conceptually and in terms of detailed case study material. While decisions around privateschoolingprovision have considerable significance for learners and their families and are a source of considerable debate in specific locales, this needs to be reflected further in policy and academic arenas. This chapter offers a contribution towards this. Through the Nepal case material it highlights the need for a broader and more politicised view of privateschooling to be explored, one that encompasses but looks beyond efficiency and effectiveness debates and how the private sector can contribute to the pursuit of Education For All. Questions around the role of schooling as an individual or social good (Colclough 1996, Psacharopoulos & Patrinos 2002), about whether formal education should be a government responsibility or opened to market forces, and what the content of that education should be are not ‘dead issues’. Rather, they are the subject of on-going political debate, and, in the case of Nepal, are fuelling one front of attack in the Maoist’s ‘People’s War’.
• Gustman and Steinmeyer (2000), using the Health and Retirement Survey’s 1931-41 birth cohort with over 7,000 respondents matched to Social Security earnings records, find that the Social Security system redistributes well on the individual level, but is much less progressive on the family level, as much of the transfers are from men to women generally, and from primary-earning to secondary earning spouses within the same family unit. Including spousal and survivors’ benefits in lifetime benefit totals reduces roughly half of the effective transfer from high earning to low earning families, as the former tend to benefit most from these valuable auxiliary benefits. They also note that much redistribution is removed in households that are classified by “potential” rather than actual income (in effect, some redistribution is given to those capable of high earnings but who instead qualify for benefits—usually spousal and survivors’ benefits—without having made corresponding additional tax payments to the system).
regardless of the system of financing (pay-as- you go, or capitalisation). Pension systems determine the standard of living of a significant part of population, and consequently its consumption, and have an impact on economy. They are influenced by economic stability or instability of a country, but also by other factors, such as employment or population development. Their financing is part of public finances, which influences their quality and sustainability , , . OECD data shows that out of total public social expenditures, expenditures of social protections on old age constituted 54% in Italy (south-European model of social protection), 41% in Austria, 36% in France and Germany (model of western continental Europe), 34% in Sweden (Scandinavian model). From the total expenditures of social protection in countries with liberal model of social policy, expenditures on old age reached, for instance, 21% in