Parents' investments and education returns

• Autores: Francesc Dilmé i Soto
• Localización: Cuadernos de economía: Spanish Journal of Economics and Finance, ISSN 0210-0266, ISSN-e 2340-6704, Vol. 32, Nº. 89, 2009, págs. 39-58
• Idioma: inglés
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• Resumen

  • This paper analyses the relation between parents� earnings and their children�s education.

    In a context of perfect altruism, the model describes parents� decisions on how much to consume and how much to invest in their children�s education. The model predicts that returns on education in terms of wages should be linear. Using this model in a competitive economy, we show how the outcome depends on government subsidies or taxes on education. The usual tradeoff equality-efficiency arises in this context. Finally, the model provides some insights into the relation between education and productivity.