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The Intergenerational Conflict Over the Provisions of Public Education

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posted on 2009-07-01, 00:00 authored by Dennis EppleDennis Epple, Richard Romano, Holger Sieg

We study the inter-generational conflict over the provision of public education. This conflict arises because older households without children have weaker incentives to support the provision of high quality educational services in a community than younger households with school-age children. We develop an overlapping generations model for households in a system of multiple jurisdictions. This model captures the differences in preferred policies over the life-cycle. We show that the observed inequality in educational policies across communities is not only the outcome of stratification by income, but is also determined by the stratification by age and a political process that is dominated by older voters in many urban communities with low quality of educational services. The mobility of older households creates a positive fiscal externality since it creates a larger tax base per student. This positive tax externality can dominate the negative effects that arise because older households tend to vote for lower educational expenditures. As a consequence sorting by age can reduce the inequality in educational outcomes that is driven by income sorting.

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2009-07-01

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