Abstract
As of the late 1990s, public spending on education in the US comprised approximately 7.1% of GDP; about 60% of that support was directed at K-12 education and the remainder at college education. We investigate the welfare and output implications of this spending in a theoretical model in which agents of differential innate ability choose whether to pursue higher education. Higher ability agents support greater expenditures at both the K-12 and college levels. When public education expenditures are low, all agents prefer that spending be directed solely to K-12 education; when expenditures are high, all prefer that some spending be allocated to college education.
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Blankenau, W., Cassou, S.P. & Ingram, B. Allocating Government Education Expenditures Across K-12 and College Education. Economic Theory 31, 85–112 (2007). https://doi.org/10.1007/s00199-006-0084-8
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DOI: https://doi.org/10.1007/s00199-006-0084-8