Education, Income Distribution and Innovation

In this paper we study the impact of the income distribution on innovation through the demand for quality goods. For simplicity, we assume that there are two types of consumers, rich and poor. The income distribution is measured by the population share of the poor and the relative income of the poor. Contrary to the literature, we assume that both are interdependent through education. The larger the income difference between the poor and the rich, the more individuals undergo education, because individuals can become rich through education. Quality goods are first invented, and then produced by oligopolists. Rich consumers have a higher willingness to pay for the better quality than the poor. Hence, the firms' profit depends on the income distribution of consumers. We focus on the separating equilibrium, where goods of different qualities are sold to different consumers. In this equilibrium, a lower relative income of the poor is good for innovation, and a larger population share of the poor is bad for innovation.inequality, growth

When will a dictator be good?

Dictatorship is the predominant political system in many developing countries. However, different dictators act quite differently: a good dictator implements growth-enhancing economic policies, e.g. investment in public education and infrastructure, whereas a bad dictator expropriates wealth of her citizens for her own consumption. The present paper provides a theoretical model by deriving underlying determinants of dictatorial behavior. We assume that the engine of economic growth is private investment. It can increase the productivity of individuals who invest, as well as the aggregate technological level. A good dictator encourages this investment in order to expropriate more. However, the cost of this encouragement is that the ensuing higher growth rate will induce earlier democratization. In this paper we will illustrate the trade-off between economic benefits from a growth-enhancing policy in the short run and the shorter life-time of the dictator in the long run. Furthermore, we will find that the higher the return from private investments is the less likely the dictator will be a good one. Contrary to McGuire and Olson (1996) we find that a long life-time does not always induce positive incentives among dictators.dictatorship, political transition, economic growth

Deep Sketch Hashing: Fast Free-hand Sketch-Based Image Retrieval

Free-hand sketch-based image retrieval (SBIR) is a specific cross-view retrieval task, in which queries are abstract and ambiguous sketches while the retrieval database is formed with natural images. Work in this area mainly focuses on extracting representative and shared features for sketches and natural images. However, these can neither cope well with the geometric distortion between sketches and images nor be feasible for large-scale SBIR due to the heavy continuous-valued distance computation. In this paper, we speed up SBIR by introducing a novel binary coding method, named \textbf{Deep Sketch Hashing} (DSH), where a semi-heterogeneous deep architecture is proposed and incorporated into an end-to-end binary coding framework. Specifically, three convolutional neural networks are utilized to encode free-hand sketches, natural images and, especially, the auxiliary sketch-tokens which are adopted as bridges to mitigate the sketch-image geometric distortion. The learned DSH codes can effectively capture the cross-view similarities as well as the intrinsic semantic correlations between different categories. To the best of our knowledge, DSH is the first hashing work specifically designed for category-level SBIR with an end-to-end deep architecture. The proposed DSH is comprehensively evaluated on two large-scale datasets of TU-Berlin Extension and Sketchy, and the experiments consistently show DSH's superior SBIR accuracies over several state-of-the-art methods, while achieving significantly reduced retrieval time and memory footprint.Comment: This paper will appear as a spotlight paper in CVPR201

Public Education for the Children Left Behind

This paper examines the role of public education in the context of parental migration, and it studies the effects of an expansive income tax policy that is adopted to increase public education expenditure per pupil. It is shown that such a policy may exacerbate income inequality in the long run if for the less skilled dynasties, the benefits of more public spending on education does not make up for the negative effects of increased parental absences. However, if the migration-induced tax base erosion is not severe, an expansive income tax policy indeed enhances future human capital for all dynasties, and moreover, it may help the less skilled households escape from the poverty trap, thus reducing long-run inequality.Human Capital; Income Inequality; Parental Migration; Public Education Expenditure; Tax Base Erosion

Low skilled immigration and the expansion of private schools

A political-economic model is provided to study the impact of low-skilled immigration on the receiving country's education system, in terms of sources of school funding, expenditure per pupil, and type of parents who are more likely to send children to privately funded schools. The education regime results from the interplay between households' choices on fertility and education and the public education provided. No exogenous culturally-based difference is assumed among agents. Low-skilled migrant workers differ from their local counterparts only in voting rights and adjustment costs. The impact of immigration on public school congestion, tax base, wages and skill premium are considered. When the number of low-skilled immigrants is large, the education regime tends to become more segregated, with wealthier locals more likely to opt out of the public system into private schools. The fertility differential between high- and low-skilled locals increases due to a quantity/quality trade-off. The theoretical predictions conform to stylized facts revealed in US census data and OECD PISA (2003).double taxation, education funding, fertility, migration, segregation, voting

Low-Skilled Immigration and th Expansion of Private Schools

This paper studies the impact of low-skilled immigration on the host country’s education system, which is characterized by sources of school funding, expenditres per pupil, and types of parents who are more likely to send children to publicly (privately) funded schools. When the size of low-skilled immigrants is large, it is found that wealthier natives are likely to opt out from public into private schools. Four main effects of immigration are taken into account : (1) greater congestion in public school; (2) lower average tax base for education funding; (3) reduced low-skilled wage and so more low-skilled natives to privately invest in their children’s education and hence weakens their support to finance public school. The theoretical predictions are not at odds with cross-country stylized facts revealed in both micro and macro data. Moreover, with endogenous fertility, the opting-out decision taken by some native parents results in the empirically observed fertility differential between natives and immigrantsVoting, Taxes and Subsidies, Education, Fertility, Migration

Low-skilled Immigration and Education Policy with Endogenous Fertility

This paper studies the impact of low-skilled immigration on the host country’s education policy, which is formulated by the natives via voting and refers to both school funding sources and resources in the public funded schools. When the size of low-skilled immigrants is large, it is found that wealthier natives are likely to opt out from public into private school. Four main effects of immigration are taken into account : (1) greater congestion in public school; (2) lower average tax base for education funding; (3) reduced low-skilled wage and so more low-skilled natives’ dependence on public education; (4) higher skill premium, which induces high-skilled natives to privately invest in their children’ s education and hence weakens their support to finance public school. The theoretical predictions are not at odds with cross-country stylized facts revealed in both micro and macro data. Moreover, with endogenous fertility, the opting-out decision taken by some native parents results in the empirically observed fertility differential between natives and immigrantsvoting, taxes and subsidies, education; fertitlity, migration

Low-Skilled Immigration and the Expansion of Private Schools

This paper provides a political-economic model to study the impact of low-skilled immigration on the host country's education system, which is characterized by sources of school funding, the average expenditure per pupil, and the type of parents who are more likely to send their children to publicly or privately funded schools. Four main effects of immigration are considered: (1) greater congestion in public schools; (2) a lower average tax base for education funding; (3) reduced wages for low-skilled workers and so more dependence by low-skilled locals on public education; (4) a greater skill premium, which makes it easier for high-skilled locals to afford private education for their children, and hence weakens their support for financing public school. It is found that when the size of low-skilled immigrants is large, the education regime tends to become more segregated with wealthier locals more likely to opt out of the public system into private schools. The fertility differential between high and low-skilled locals increases due to a quantity/quality trade-off. The theoretical predictions are consistent with empirical evidence from both the U.S. census data and the OECD Programme for International Student Assessment (2003).voting, taxes and subsidies, education, fertility, migration