In this paper, we quantitatively assess the welfare implications of alternative public education spending rules. To … this end, we employ a dynamic stochastic general equilibrium model in which human capital externalities and public … education expenditures, financed by distorting taxes, enhance the productivity of private education choices. We allow public …

We propose a model of intergenerational transmission of education wherein children belong to either highly educated or … interactions with other low-educated students (i.e., homophily), which reduces the education effort of their parents and, thus … kids from different education backgrounds can be effective in reducing the education gap between them. …