Wealth distribution and skills generation under public and private education systems

1. Introduction Deep in a citrus grove, law officers crept up on Dionatan Rocha and caught him redhanded. Dionatan, a 12-year-old wearing a baseball cap and T-shirt, was picking oranges, in plain violation of Brazil's child-labor code.... Says Mr. Grajew: `Brazil's chronically unequal wealth distribution has one root cause: Millions of children are working instead of studying.' (Moffett 1998). To reduce income inequality and spur economic development, many have advocated increased support for public education. However, public education may not be a silver bullet to eliminate poverty or lower income inequality. Fields (1980) reports that income inequality in several developing countries did not lessen even after an increased allocation of resources to public education. Sylwester (2002) considers how education expenditures are associated with subsequent changes in income inequality within a cross-section of countries. After dividing the sample into OECD and less-developed-country subsamples, he finds that education expenditures are more strongly associated with falling income inequality in the former group. One possible reason for these differing outcomes is that even when public education is freely provided, attendance is not guaranteed, especially in poorer nations. As in the above account, families may place their children in the labor force even if this is illegal, since the income that these children generate is nontrivial to the welfare of the family. Consequently, a subset of the population may exist that has little if any formal schooling, thereby limiting opportunities for these individuals later in life and possibly creating a permanent underclass. Poor children work rather than attend school and thus remain poor as adults. These adults then need their children to work to help support the family, and this poverty persists through another generation. Therefore, a better understanding of this cycle and of the policies that can break this cycle is needed to help alleviate poverty in these nations. This is not the first paper to examine how public education affects income inequality or poverty. Glomm and Ravikumar (1992) develop a model in which agents vote for a public or private education system and in which a public education system benefits low-income agents relative to high-income agents. Consequently, a public education system unambiguously decreases the level of income inequality. Saint-Paul and Verdier (1992) and Zhang (1996) also conclude that public education helps to lower income inequality over time. A critical assumption of these models is that attending public school is costless and so all agents attend. However, Jimenez (1986) finds that this assumption is questionable in many developing countries. Although public education is often provided freely, it is not necessarily costless. Those attending school forgo income that could have been used to help support a family, and in some cases this income is necessary for the family's survival. Jimenez (1986) also reports that taxation in many developing countries is regressive. Taken together, these assertions imply that in some countries poor families are hurt by the taxation used to support public education but do not receive many of the benefits. In fact, these public education systems might even be contributing to an increase in the level of income inequality. This paper creates a model that explores some of these issues. Like those of Perotti (1993) and Galor and Zeira (1993), this model does not assume that all agents partake in public education. Instead, agents face an opportunity cost associated with going to school and thus choose how much schooling to acquire. It is possible that the level of income inequality does not decline even in the presence of a public education system. Fernandez and Rogerson (1995) also capture some of these concerns in their model of public education with endogenous subsidies. In their model, only agents attending school receive education subsidies, and so highincome agents (who have the means to attend school) then have an incentive to vote for high subsidies. …

This paper analyzes the roles of innate talent versus family background in shaping intergenerational mobility and social welfare under different education systems. We establish an overlapping-generations model in which the allocation of workers between a high-paying skilled labor sector and a low-paying unskilled labor sector depends on talent, parental human capital, and educational resources, and the wage rate of skilled workers is determined by their average talent. Our model suggests that under the private education system, there is a negative relationship between income inequality and social mobility, and the steady-state average talent of skilled workers decreases with educational investments. Under the public education system that provides all children with equal educational resources, the allocation of workforce depends more on talent and less on family background. Consequently, both mobility and inequality increase, and social welfare may improve under reasonable conditions. When private educational investments are allowed on top of public education, the steady-state social welfare increases further. Moreover, if some parents are myopic, public education yields the highest welfare.

How does the effect of child mortality reductions on fertility and education vary across educational systems? To answer this question, we develop an overlapping-generations model where altruistic parents care about both the number and human capital of their surviving children. We find that, under a private education system, if income is low initially, the economy converges to a Malthusian stagnation steady state. For a high level of initial income, the economy reaches a growth path in which children’s education rises and fertility decreases with income. In the growth regime under private education, exogenous shocks that lower child mortality are detrimental for growth: fertility increases and education declines. In contrast, under a public education system, the stagnation steady state does not exist, and health improvement shocks are no longer detrimental for growth. We therefore offer a new rationale for the introduction of public education.

This paper analyzes the roles of innate talent versus family background in shaping intergenerational mobility and social welfare under different education systems. We establish an overlapping-generations model in which the allocation of workforce between a high-paying skilled labor sector and a low-paying unskilled labor sector depends on talent, parental human capital, and educational resources, and the wage rate of skilled workers is governed by their average talent. Our model suggests that under the private education system, income inequality is inversely associated with social mobility, and the steady-state average talent of skilled labor declines as parents increase educational spending. The introduction of public education, which makes the allocation of workforce depend more on talent and less on family background, tends to increase both inequality and mobility and improve welfare under reasonable conditions. Our simulations show that if the government diverts public school funding to redistribution, the economy has lower inequality and mobility in the steady state. Moving from elitist to meritocratic systems yields lower inequality and greater mobility.

This study explored the class level equivalent to the national literacy definition of public and private education systems in Pakistan. The main objective was to assess whether different class levels of primary education meet the national literacy standards in reading, writing, and arithmetic. A total of 1,000 students made up the sample of this research, including students from public, private, non-formal, and Madaris education systems in both rural and urban areas of District Bahawalpur. A test was initially administered on a small scale to check its validity. After validating the test, it was administered on a larger scale. The data concluded that the achievement of grade five students in reading, writing, and arithmetic skills was much higher in reading skills and slightly higher in writing and arithmetic skills. Based on these results, grade five met the national literacy standards.

This paper explores the impact of increasing longevity and declining fertility on long-term economic growth, focussing on the tension between pension obligations and human capital accumulation. We develop a three-period Overlapping Generations (OLG) model that integrates both private and public education systems, alongside a pay-as-you-go (PAYG) social security scheme. Our baseline analysis highlights that as longevity rises, government expenditure is redirected from education to pensions, dampening economic growth. We demonstrate that delayed retirement can mitigate this by increasing public education spending and reducing the incentive to save among young adults. By implementing a retirement plan that indexes the retirement age to longevity, it is possible to simultaneously achieve targeted growth and replacement rates. Furthermore, we extend the model to include endogenous fertility decisions and intergenerational time transfers, finding that raising the retirement age reduces the supply of grandparental childcare, thereby increasing the opportunity cost of child-rearing and consequently reducing fertility. Private education investment remains stagnant in the endogenous fertility setting, where the income and substitution effects induced by delayed retirement cancel each other out. This finding challenges the standard Ben-Porath mechanism, suggesting that private education investment is unresponsive to longer working lives. Our findings underscore the vital role of public education investment in the formation of human capital.

The influence of culture, society, politics and the market economy creates a more complicated and confusing environment in which families live and grow. Not the least among these influences is the plethora of options currently available to families for the education of children. The decision to send children to the local public school, to a neighborhood parochial school, or to an expensive private school has been expanded to include: charter schools, public schools of choice, schools for special needs students, private religious schools, and schooling at home.Home Schooling in AmericaThe education of children in America, from an historical perspective, has been characterized by Carper (2000) as pluralism (p. 9). From the earliest days of the settlement of the colonies, until approximately the mid-1800's, the education of children was the primary prerogative of parents. Education consisted mainly of learning to read the religious literature and learn the appropriate amounts of arithmetic in order for children to assume a vocation. Education of children occurred not only in homes, but in a wide variety of school situations that made the distinction between public and private education very difficult.By the middle of the eighteenth century, families had begun to turn many of their traditional responsibilities over to formal or public institutions. According to Mintz and Kellogg, as cited in Carper (2000, p. 11), by this time: ... a variety of specialized institutions had begun to absorb traditional familial responsibility.... Free schools and common pay schools educated a growing number of the sons of artisans and skilled laborers. During this transitional period, the demarcation between public and private education was vague.The public school movement gained momentum and support from the Protestant denominations of that day. Protestant broad support of public education was garnered by virtue of the similarities of belief and philosophy shared by religious and educational institutions. Carper (2000) observes that the differing belief systems of the Protestant denominations and the Roman Catholic Church eventually resulted in tax dollars being unavailable to Catholic schools. By the mid-nineteenth century the line between public and private education of children was well defined.Besides having the strong support of Protestant evangelicals, public schools in the mid-nineteenth century were very localized. The majority of children in public schools were from rural areas and attended the one-room country school. These schools were administrated and funded by local people, taught by local residents, and the children were often from only a few families. Home schools became a smaller part of the educational landscape because the public school was such an approximation of the rural family.As populations became increasingly urban at the beginning of the twentieth century, schools became less philosophically similar to Protestantism, broader in terms of its funding and leadership, diverse in.its teachers, and taught children from many more families. These influences gave the public education system characteristics of a developmental environment in and of itself, and increasingly dissimilar from the Protestant familial model. Once crusaders for the establishment of public education, conservative Protestants are now, ironically, among its most vociferous critics (Carper, 2000, p. 16).The disenchantment of Protestant evangelicals with the public education system has resulted in a renewed interest in education at home. In fact, Protestant evangelical families comprise the majority of home schools in America. In a recent study of 22,000 home school families, Protestant evangelicals comprised 70.3 percent of the respondent families (Rudner, 1998).Achievement of Home School StudentsThe above referenced study by Rudner (1998) analyzed test scores of home schooled students who were administered the Iowa Tests of Basic Skills and the Tests of Achievement and Proficiency. …

One of the largest expenditures of state and local governments in the USA, and of various governments at all levels in other countries, is for the provision of education. In the USA, states provide a free public school education to students for the first twelve years, and subsidize tuition at state universities thereafter. As a result, public education has become a near monopoly because privately provided education finds it difficult to compete on price. Where private education exists, it can compete only because of nonprice advantages. This near monopoly position with regard to education exhibits many of the attributes of monopolies in general -- the price is higher than would be the case in a market system and the quality is lower. This phenomenon has been recognized, and some economists and others have advocated breaking up this monopoly by the use of a voucher system whereby parents can purchase education for their children by presenting these vouchers to the appropriate authority. Vouchers inject choice and competition into the public education system, which, it is thought, will overcome the disadvantages of the present near-monopoly situation. The funds for these vouchers would be provided by taxation, just as the public school system is presently funded by taxation, except that parents would have some power to decide where the tax proceeds flow. While the use of vouchers would trigger markets, and would cause the price of public education to decrease while improving quality of service, vouchers are only a half-way measure because they ignore some fundamental issues, such as whether government should be in the business of providing education in the first place. This paper explores the possibility of privatizing education and attempts to answer questions such as: Is providing for public education a legitimate function of government? How would education be funded if government didn't do it? How would a privately funded education system provide for those who couldn't pay?

This study philosophically examines the relationship between public and private education, aiming to explore the possibility of establishing a new, educationally meaningful relationship beyond the existing phenomenon-centered perspectives. To this end, it first analyzes the conceptual and historical development of public and private education in South Korea, revealing that both forms of education have been predominantly defined at an institutional level, with insufficient attention to ideological dimensions. It then critically examines the underlying assumptions within the perception of the private education problem, pointing out that the current view (1) equates the issue of private education expenses with the problem of private education itself, (2) considers public and private education as opposing forces, and (3) mistakenly assumes the current relationship between the two as the only possible framework. Based on these analyses, the paper highlights a fundamental error in the conceptualization of the relationship between public and private education, which has led to the failure of current private education policies in addressing public education challenges. The paper emphasizes that public and private education can enhance the totality of educational experiences when positioned in a complementary relationship. Therefore, a reconfiguration of their relationship is necessary, both ideologically and structurally. Public education, in particular, derives its intrinsic value from the “educational significance attainable only through collective learning experiences.” Thus, the paper sheds new light on the possibility of public and private education coexisting in a complementary rather than subordinate relationship. To realize this potential, public education should be redefined from “education managed by the public” to “education that pursues public values,” emphasizing the unique educational significance achievable only through public education.

The seemingly upward trend in opting out from public services and the segregation of income groups in public and private education and health systems has raised concerns about the future of an already fragmented social contract in Latin America. In this chapter, we examine the evolution of the use of private education and private health insurance in selected countries during the first two decades of the 2000s. We also examine the socio-demographic correlates of the decision to opt out, and the association it has with attitudes that are relevant to understand the foundations of the social contract in the region. Overall, the evidence suggests that scholars concerns about the fragility of the social contract are justified, but with some nuances. Wealthy households are mostly opting out of the public education system, and the middle-class is split with a substantial proportion of households opting for private schools. On the other hand, opting out from public health is only prevalent among wealthy households, and even within that group the share of households who are paying for a private health insurance is much smaller than the share of households who opt for private education. For both policy domains, however, we find that people who use private services have worse evaluations of public services, express less support for the public provision of those services, and more generally, are less supportive of redistribution compared to people inside the public systems. We discuss the implications of these descriptive statistics for the sustainability of the public provision of services and the social contract.

Education regulation as an instrument of income distribution: The case of Ceara

This study employs an overlapping-generations model featuring public and private education to analyze whether providing child allowances and free high school education influences economic growth. Earlier studies that analyze public and private education (Glomm and Ravikumar, 1992; Cardak, 2004) do not consider models in which fertility is endogenous and individuals can simultaneously choose both public and private education. Earlier studies that consider the effect of child allowances on fertility (Groezen, Leers, and Mejidam, 2003) disregard human capital accumulation. This study assumes people can choose both public and private education simultaneously in a model in which both fertility and human capital accumulation are endogenous. It introduces both child allowances and investment in public education financed by income taxes. It further considers how raising child allowances or investing in public education affects fertility, human capital accumulation, and economic growth. This study is motivated by evidence that the burden of meeting children’s educational expenses is one reason for Japan’s declining birthrate. It analyzes whether child allowances or free high school education can increase the birthrate and promote human capital formation. We find that such policies are unlikely to promote economic growth if they are financed by income taxes that cannot be increased indefinitely.

Historical and legal, historical and economic aspects of the process of formation and development of the system of public preschool education in Ukrainian SSR in 20s – early 30s of the XX century have been analyzed. It has been proved that the issue of preschool education with the victory of the Soviet government took its place in the general system of education’s development, which the Bolsheviks began to introduce first in the industrial regions in 1919, and then throughout Ukrainian SSR. The authors have the legal basis of the process of formation and development of the system of public preschool education in Soviet Ukraine in 1919–1933. The upbringing of children from the early age, according to the Program of the party and the decisions of the Soviet government, had to become the complete prerogative of public educational agencies. The main reasons for the rapid growth in the number of institutions of state and public education of children of preschool age have been analyzed. That process was caused by the economic devastation in Ukraine as a result of the First World and Civil Wars, which doomed more than one million children to starvation. State authorities were forced to make certain commitments to provide food and education for deprived children. There is a destruction of the old pre-revolutionary pedagogy, which considered preschool education only as a forced measure for working parents and orphans, by giving preference to family upbringing of children at an early stage of life. It has been proved that the system of legal regulation of financing of public preschool education in Ukrainian SSR at that time has passed three stages of development: – 1919–1922 – financing of preschool institutions was carried out in a centralized way by monthly allocations from the republican budget, as well as from the budget of central agencies; – 1923–1927 – financing of preschool institutions was transferred from the republican to local budgets; – 1928–1933 – attraction of state and local councils’ budgets, funds from trade unions, other institutions and enterprises, parental payment. There was the final consolidation of budgetary sources of maintenance of preschool education system in the legislation. There was the thesis that the legal consolidation of financing of preschool education in Ukraine should reflect the priority of public importance and state support of this field of educational activity from the standpoint of investing in the future of the state, forming the foundations of a harmonious personality as a prerequisite for successful secondary and later higher education. It has been emphasized that the financing of preschool education and its legal consolidation should be aimed at stimulating the work of educational and pedagogical staff, attracting highly qualified specialists to this field. Society and the state must realize that this category of professionals have the prerequisites for successful development, prosperity of future generations.

The ‘googlization’ of education is emblematic of the growing power of private tech companies in schools across the globe, challenging education as a public good. While critical scholarship has started unpacking the ideological, pedagogical and economical logics underpinning Google’s digital infrastructure in schools, we have little insight into how googlization unfolds in education systems across the world. This article addresses this by examining the googlization of education across three countries – The US, Australia, and The Netherlands – focusing on the work by new and established intermediary actors which mediate platform power between private tech companies and public education systems. Our findings highlight five different types of intermediary work that broker dependence on Google in schools. The paper concludes by outlining how education researchers and institutions might reclaim public education by intervening in the googlization of education.

This study aims to examine the hybridity of North Korea’s education system by analyzing the development of educational infrastructure and residents’ participation in private education under Kim Jong-un’s leadership. During the Arduous March of the 1990s, North Korea experienced the collapse of public education and the emergence of private education. In the Kim Jong-un era, the government has emphasized the knowledge economy and the information industry while actively working to develop its educational infrastructure. This study first identifies key characteristics of these changes by analyzing trends in education budgets and case studies of educational informatization. Additionally, in-depth interviews were conducted to gain insights into residents' experiences with private education. Private education has been embedded within the conditions and environment of the public education system. Therefore, examining both public and private education together is crucial to understanding the current state of North Korea’s education system. The findings indicate that educational expenditures have steadily increased. Investments have been concentrated on higher education rather than primary education, with significant progress in educational informatization observed in Pyongyang. This reflects a strategy of selective development. However, concerns over regional and structural imbalances persist. Private education functions as both a substitute for and a supplement to public education, and there is a growing trend of private education for hobbies and cultural enrichment. The development of educational infrastructure in North Korea under Kim Jong-un’s leadership is a necessary step toward shaping the country’s future. However, if issues such as budget constraints, digital divides, and social inequality are not addressed, the hybrid and transitional nature of the education system—where public and private education are intricately intertwined—will inevitably persist.