Haaparanta, Pertti Kanbur, Ravi Paukkeri, Tuuli Pirttilä, Jukka Tuomala, Matti
Year of Publication:
CESifo Working Paper No. 8575
A common claim in the policy discourse is that a government wishing to achieve equality of opportunity should use public provision of education for equalisation of opportunities rather than income taxation, which only equalizes incomes. We develop a framework in which the tax and education provision rules in the welfarist and non-welfarist/equality of opportunity cases can be transparently compared. We show that in addition to education policies, progressive taxation also plays a role in achieving equality of opportunity, and illustrate how its use may differ under the two objectives. We also show how the provision of public education depends on how private education choices respond, potentially differentially by higher- and lower-income families.
educational subsidies equality of opportunity income taxation inequality public good provision