Assume now that education is provided by public schools fixing the level of education for all agents at eit = epub = const.. Assume further that agents are not able to provide additional education privately, i.e. they treat the level of education as given. Public schooling is financed by a proportional tax, 0 << 1 on labour incomes such that the budget constraint of a household i reads as (1-v) whub (1 — 2n-pub) = c.pub (5) a. Derive the desired number of children under the assumption that education is provided by public schooling. Explain very briefly the difference of your result as compared to 1). b. The government has to observe a balanced budget, i.e. expenditures for public schooling equal tax revenues (whub (1-znb) Nt), where N₁ represents the number of parental households in the economy. Derive the level of public edu- cation epub for a given tax and explain this result. c. Given your observations in 1)c., consider an economy that converges towards 2. When and why would you recommend (if at all) that education should be provided by public schools?

Assume now that education is provided by public schools fixing the level of education for all agents at eit = epub = const.. Assume further that agents are not able to provide additional education privately, i.e. they treat the level of education as given. Public schooling is financed by a proportional tax, 0 << 1 on labour incomes such that the budget constraint of a household i reads as (1-v) whub (1 — 2n-pub) = c.pub (5) a. Derive the desired number of children under the assumption that education is provided by public schooling. Explain very briefly the difference of your result as compared to 1). b. The government has to observe a balanced budget, i.e. expenditures for public schooling equal tax revenues (whub (1-znb) Nt), where N₁ represents the number of parental households in the economy. Derive the level of public edu- cation epub for a given tax and explain this result. c. Given your observations in 1)c., consider an economy that converges towards 2. When and why would you recommend (if at all) that education should be provided by public schools?

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter17: Income, Poverty, And Health Care

Section: Chapter Questions

Problem 11P

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