Income Inequality and Public Expenditure on Non-Compulsory Education in Western Europe from 1999-2010 Public Deposited

http://ir.library.oregonstate.edu/concern/graduate_projects/k930bz753

2012

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  • Policies in Europe over the last half a century have steadily dismantled the inequality-easing processes of the welfare state. Current conditions coupled with concerns related to the recent economic downturn have heightened focus on the issue of income distribution. Education has been identified as a resource to combat such ills. Funding for non-compulsory education levels exhibits greater promise for wider support as it circumvents the welfare state. This paper examines the relationship between public funding for upper secondary and tertiary education and income inequality for fifteen Western European countries. Six time series models were used in the analysis for the years 1999-2010. It was determined that increased tertiary education expenditure is correlated with lowered levels of income inequality at a greater magnitude than funding for upper secondary education. Therefore, policies should be enacted that take benefits of advanced human capital accumulation into account. This paper recommends income-contingent loan schemes that limit risk and enable cost sharing between taxpayers and graduates.
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