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C 2010 Blackwell Publishing Ltd and the Board
2010 The Authors. Journal compilation
of Trustees of the Bulletin of Economic Research. Published by Blackwell Publishing, 9600
Garsington Road, Oxford OX4 2DQ, UK and 350 Main St., Malden, MA 02148, USA.

Bulletin of Economic Research 62:1, 2010, 0307-3378
DOI: 10.1111/j.1467-8586.2009.00317.x

PUBLIC EDUCATION EXPENDITURES,
HUMAN CAPITAL INVESTMENT
AND INTERGENERATIONAL MOBILITY:
A TWO-STAGE EDUCATION MODEL
Mohamed Ben Mimoun and Asma Raies
TEAM, Universit´e de Paris 1 Panth´eon-Sorbonne, France

ABSTRACT

We show in this paper that, depending on the initial distribution of
material wealth and that of individuals’ abilities, economies converge
in the long run towards different proportions of the skilled workforce
and different levels of average wealth. We also show that the growth
process raises net economic mobility, the long-run proportion of the
skilled population and the long-run levels of wealth held by both
rich and poor dynasties. Unless the income tax rate is too high,
the increase in total public funds is associated, in the long run,
with higher net mobility, a larger fraction of the skilled workers
and higher levels of wealth of all the dynasties. In addition, the
reallocation of public expenditures from basic to advanced education can result in lower mobility, a lower long-run size of the
skilled workforce, and a lower long-run level of wealth held by
rich dynasties, if the transfer of resources comes at the expense of
excessively lowering the quality of education at the basic schooling
level.
Keywords: distribution of wealth and abilities, economic mobility,
human capital investment, public education provision policies
JEL classification numbers: H52, I22, I28, O1, O15

Correspondence: Ben Mimoun Mohamed, TEAM, Universit´e de Paris 1 Panth´eon-Sorbonne,
Paris, France. Tel: (00336) 12 80 16 60; Email: Mohamed.Benmimoun@malix.univparis1.fr.

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