Department of Economics
University of Delaware
Working Paper #2005-05
A Dynamic General Equilibrium Analysis of the Political Economy of Public Education.
The primary objective of this paper is to highlight the distinct roles of
altruism and of self-interest in the political determination of a public
education policy. I assess the relative importance of three factors in the
determination of the equilibrium level of this policy: altruism, the impact of
public funding of education on social security benefits and its impact on factor
prices. I then focus on the impact of implementing a social security system on
the equilibrium levels of education funding and on welfare. I find that
although, in the benchmark economy, the presence of social security might
generate support for public funding of education, its overall effect on the
well-being of individuals is negative for any level of social security taxation.
JEL Classification: D78, E62, I22.
Key words: Public Education, Voting, General Equilibrium.