Human Capital Accumulation and Income Distribution

The non-existence of credit markets implies that initial income is a determinant of who actually obtains an education. We consider the outcome of a process in which income is taxed to provide subsidies for education. and taxes are chosen by majority voting. We characterize the outcome as a function of both the level and the distribution of income in the economy. In particular we derive conditions under which middle income individuals ally themselves with upper income individuals at the expense of lower income individuals, and vice versa. The analysis determines the relationship between human capital accumulation and distribution of income.

Education Finance Reform and Investment in Human Capital: Lessons from California

This paper examines the effect of different education financing systems on the level and distribution of resources devoted to public education. We focus on California, which in the 1970's moved from a system of mixed local and state financing to one of effectively pure state finance and subsequently saw its funding of public education fall between ten and fifteen percent relative to the rest of the US. We show that a simple political economy model of public finance can account for the bulk of this drop. We find that while the distribution of spending became more equal, this was mainly at the cost of a large reduction in spending in the wealthier communities with little increase for the poorer districts. Our model implies that there is no simple trade-off between equity and resources; we show that if California had moved to the opposite extreme and abolished state aid altogether, funding for public education would also have dropped by almost ten percent.

Income Distribution and Public Education: A Dynamic Quantitative Evaluation of School Finance Reform

Many states have or are considering implementing school finance reforms aimed at lessening inequality in the provision of public education across communities. These reforms will tend to have complicated aggregate effects on income distribution, intergenerational income mobility, and welfare. In order to analyze the potential effects of such reforms, this paper constructs a dynamic general equilibrium model of public education provision, calibrates it using US data, and examines the quantitative effects of a major school finance reform. The policy reform examined is a change from a system of pure local finance to one in which all funding is done at the federal level and expenditures per student are equal across communities. We find that this policy increases average income and total spending on education as a fraction of income. Moreover, there are large welfare gains associated with this policy; steady-state welfare increases by 3.2% of steady-state income.

Keeping People Out: Income Distribution, Zoning and the Quality of Public Education

This paper examines the effect of community zoning regulations on allocations and welfare in a two-community model. Each community uses a local property tax to finance public education. Tax rates are determined by majority vote within each community, and individuals choose in which community to reside. We study exogenously imposed zoning regulations as well as the case where the regulator is endogenously determined by majority vote. Our analysis indicates that a number of outcomes are theoretically possible. Several interesting results emerge from simulations of the model. Although zoning tends to make the rich community more exclusive, this need not increase the quality of education in the rich community relative to the poor community. Welfare effects are not monotone in income; some lower income individuals benefit and some higher income individuals are made worse off when zoning is introduced.

Sorting and Long-Run Inequality

Many social commentators have raised concerns over the possibility that increased sorting in a society can lead to greater inequality. To investigate this we construct a dynamic model of intergenerational education acquisition, fertility, and marital sorting and parameterize the steady state to match several basic empirical findings. Contrary to Kremer's (1997) finding of a basically insignificant effect of marital sorting on inequality, we find that increased marital sorting will significantly increase income inequality. Three factors are central to our findings: a negative correlation between fertility and education, a decreasing marginal effect of parental education on children's years of education, and wages that are sensitive to the relative supply of skilled workers.

Income Distribution, Communities and the Quality of Public Education: A Policy Analysis

This paper analyzes within the context of a multicommunity model the effects of several policies that affect the financing of public education. The key features of the model are: (I) individuals differ with respect to income, (ii) individuals choose in which community to reside, (iii) communities are characterized by a proportional tax on income and a quality of public education, and (iv) a community's tax rate is chosen by majority vote. We examine three types of policies: subsidies for residency of specific income groups in particular communities, ceilings or floors on community level educational spending, and income redistribution. In each case we examine the consequences of these policies for both welfare and the quality of education across communities. We identify several policies which make all individuals better off and increase the quality of education in all communities.

The Impacts of Off-Farm Income on Farm Efficiency, Scale, and Profitability for Corn Farms

This paper estimates returns to scale and technical efficiency of corn farms following an input distance function approach and compares the relative performance of farm operator households with and without off-farm wages and salaries. We use 1995-2003 USDA data. The input distance function results suggest that off-farm outputs and inputs can be modeled in a multi-activity framework, which materially alter performance measures in the Corn Belt. We find that off-farm income boosts scale and technical efficiency of smaller operations. We also find that the number of hours worked off-farm by the spouse contributes to a higher technical efficiency.Farm Management,

Commutator methods for unitary operators

We present an improved version of commutator methods for unitary operators under a weak regularity condition. Once applied to a unitary operator, the method typically leads to the absence of singularly continuous spectrum and to the local finiteness of point spectrum. Large families of locally smooth operators are also exhibited. Half of the paper is dedicated to applications, and a special emphasize is put on the study of cocycles over irrational rotations. It is apparently the first time that commutator methods are applied in the context of rotation algebras, for the study of their generators.Comment: 15 page