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Intergenerational Transfer of Human Capital and Optimal Education Policy

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Cremer, Helmuth [University of Toulouse] Pestieau, Pierre [UCL]

We study the design of education policies (subsidies and public education) when parents' investment in education is motivated by warm-glow altruism and determines the probability that a child has a high ability. The optimal subsidy is not necessarily positive. It is determined by two conflicting terms: a Pigouvian term (warm-glow altruists do not properly account for the impact of education on future generations) and a "paternalistic" effect (the warm-glow term may not be fully included in social welfare). Finally, total crowding out of private expenditure (for one of the types) by public education may be desirable.

Document type Article de périodique (Journal article)
Publication date 2006
Language Anglais
Journal information "Journal of Public Economic Theory" - Vol. 8, no. 4, p. 529-545 (Octobre 2006)
Peer reviewed yes
Publisher Wiley-Blackwell Publishing, Inc. (Malden, USA)
issn 1097-3923
e-issn 1467-9779
Publication status Publié
Affiliations University of Toulouse - Gremaq
University of Liege
Links
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Bibliographic reference Cremer, Helmuth ; Pestieau, Pierre. Intergenerational Transfer of Human Capital and Optimal Education Policy. In: Journal of Public Economic Theory, Vol. 8, no. 4, p. 529-545 (Octobre 2006)
Permanent URL http://hdl.handle.net/2078.1/23626