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In a two-period model, firms specialized in two different sectors lobby to induce the government to subsidize the type of education complementary to their production. Lobbying is endogenous. We show that, if lobbying is not costly, both sectors will lobby in equilibrium and education policy will induce the same skill composition that would be chosen by the social planner. However, if lobbying is costly, only one sector finds it profitable to offer monetary contribution and direct resources towards the type of education required by its production. Which sector will engage in lobbying depends on relative size, productivity and price in the two sectors.

Firms specialized in two different sectors lobby to induce the government to subsidize the type of education complementary to their production. Lobbying is endogenous. We show that, if lobbying is not costly, both sectors will lobby in equilibrium and the education policy will induce the same skill composition that would be chosen by the social planner. However, if lobbying is costly and there is sufficient asymmetry between the sectors, only one sector will exert pressure on the policy‐maker in the attempt to direct resources toward the type of education required by its production. Which sector will engage in lobbying depends on relative size, productivity, and price. We also provide some preliminary evidence that lobbying activity by firms may influence the production of skills needed by those firms.

In a two-period model, firms specialized in two different sectors lobby to induce the government to subsidize the type of education complementary to their production. Lobbying is endogenous. We show that, if lobbying is not costly, both sectors will lobby in equilibrium and education policy will induce the same skill composition that would be chosen by the social planner. However, if lobbying is costly, only one sector finds it profitable to offer monetary contribution and direct resources towards the type of education required by its production. Which sector will engage in lobbying depends on relative size, productivity and price in the two sectors.

Regression results show that more unequal societies tend to spend comparatively more on higher levels of education. In a two-period model with heterogeneous agents, this paper investigates the political determinants of this bias. In the first period, public education is financed by the incumbent government by issuing bonds. Investments in basic and higher education have conflicting effects on future labour income distribution and net returns to these investments depend on the tax and transfers system being selected in the following period through the democratic process. Our idea is that public investment in basic education, by decreasing future labour income inequality, may induce future policy-makers to redistribute resources through financial rents taxation, thus making unfeasible the issuing of debt to finance basic education. This will be the more probable the greater wealth inequality is. [Copyright Elsevier B.V.]

"Regression results show that more unequal societies tend to spend comparatively more on higher levels of education. In a two-period model with heterogeneous agents, this paper investigates the political determinants of this bias. In the first period, public education is financed by the incumbent government by issuing bonds. Investments in basic and higher education have conflicting effects on future labour income distribution and net returns to these investments depend on the tax and transfers system being selected in the following period through the democratic process. Our idea is that public investment in basic education, by decreasing future labour income inequality, may induce future policy-makers to redistribute resources through financial rents taxation, thus making unfeasible the issuing of debt to finance basic education. This will be the more probable the greater wealth inequality is." (Author's abstract, IAB-Doku) ((en))

The design of the educational system affects the degree of students' equality of opportunities and the intergenerational social mobility. The topic is therefore of paramount importance. In this paper, we document differences in educational systems among OECD countries and argue that the system observed in a country is the result of a complex interaction between preferences for education and political competition. To analyse individual preferences over education funding, we build a model that allows us to study the effects of public funding on the welfare of agents, which are heterogeneous in terms of income and human capital. The model takes into account the hierarchical nature of the educational system and emphasises the role played by family background. Our theoretical results might help to explain why some OECD countries seem to remain stuck in "low education" traps.

In cases where policymakers accept "bribes" offered by organized lobbies or interested parties, government decisions can be modeled as a first price menu auction. In this paper, we adapt this structure to model debt repudiation. We consider a one-period model in which two generations, parents & children, are present, & debt titles are unevenly distributed among parents. The government can repay the debt by a combination of taxes on the children's income & on the outstanding debt. We exclude intergenerational conflicts, assuming that the parents' & children's objective is to maximize the utility of the family. In this perspective, families make offers that relate monetary contributions to the tax structures chosen by the government. On the hypothesis that all interests are represented, we obtain the result that the government is indifferent to the tax structure. 3 Figures, 18 References. Adapted from the source document.