Abstract

FLORES CURIEL, Daniel. Subsidizing or taxing education? A note on the quality gap and government finances. Estud. Econ. (México, D.F.) [online]. 2016, vol.31, n.2, pp.339-353. ISSN 0186-7202.

In this article, I study the effects of an education tax (or subsidy) on the quality gap between public and private education as well as on government finances. In order to do this, I model the behavior of a private school that chooses price and quality in order to compete for students with a public school. Among other things, I show that a per-unit tax (or subsidy) can increase (reduce) the quality gap and worsen (improve) government finances.

Keywords : education; quality; taxes; subsidies.

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