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Endogenous growth and welfare effects of education subsidies and intergenerational transfers

We consider an overlapping generations model with endogenous growth and embrace the Two-Part Golden Rule criterion to analyze the welfare effects of intergenerational transfers and education subsidies. The results are compared with those obtained within the well-known exogenous growth framework. In both cases, pay-as-you-go social security enhances welfare if the growth rate is larger than the interest rate at the laissez-faire. However, with endogenous growth, pay-as-you-go social security may also increase welfare even if the growth rate of the economy is less than the interest rate. Education subsidies have an ambiguous impact because they simultaneously transfer resources across generations and change the relative price of investing in human capital. Overall, the paper shows the existence of important non-monotonicities associated with the welfare effects of modifying the tax parameters in an endogenous growth framework

We also acknowledge financial support from Instituto de Estudios Fiscales (Spanish Ministry of Finances, 2014-15), the Spanish Ministry of Science (projects ECO2013-45395-R and ECO2012-37572) and the Generalitat de Catalunya (contracts 2014SGR1360 and 2014SGR327, and the XREPP)

info:eu-repo/grantAgreement/MINECO//ECO2013-45395-R/ES/BIENESTAR, MECANISMOS DE ASIGNACION Y POLITICAS PUBLICAS/

Elsevier

Director: Ministerio de Economía y Competitividad (Espanya)
Autor: Rey Canteli, Elena del
López García, Miguel Ángel
Data: gener 2016
Resum: We consider an overlapping generations model with endogenous growth and embrace the Two-Part Golden Rule criterion to analyze the welfare effects of intergenerational transfers and education subsidies. The results are compared with those obtained within the well-known exogenous growth framework. In both cases, pay-as-you-go social security enhances welfare if the growth rate is larger than the interest rate at the laissez-faire. However, with endogenous growth, pay-as-you-go social security may also increase welfare even if the growth rate of the economy is less than the interest rate. Education subsidies have an ambiguous impact because they simultaneously transfer resources across generations and change the relative price of investing in human capital. Overall, the paper shows the existence of important non-monotonicities associated with the welfare effects of modifying the tax parameters in an endogenous growth framework
We also acknowledge financial support from Instituto de Estudios Fiscales (Spanish Ministry of Finances, 2014-15), the Spanish Ministry of Science (projects ECO2013-45395-R and ECO2012-37572) and the Generalitat de Catalunya (contracts 2014SGR1360 and 2014SGR327, and the XREPP)
Format: application/pdf
Accés al document: http://hdl.handle.net/10256/13163
Llenguatge: eng
Editor: Elsevier
Col·lecció: info:eu-repo/semantics/altIdentifier/doi/10.1016/j.econmod.2015.09.033
info:eu-repo/semantics/altIdentifier/issn/0264-9993
És part de: info:eu-repo/grantAgreement/MINECO//ECO2013-45395-R/ES/BIENESTAR, MECANISMOS DE ASIGNACION Y POLITICAS PUBLICAS/
Drets: Tots els drets reservats
Matèria: Educació -- Aspectes polítics
Education -- Political aspects
Creixement endogen (Economia)
Endogenous growth (Economics)
Recursos humans
Human capital
Títol: Endogenous growth and welfare effects of education subsidies and intergenerational transfers
Tipus: info:eu-repo/semantics/article
Repositori: DUGiDocs

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