INCOME-DISTRIBUTION, COMMUNITIES, AND THE QUALITY OF PUBLIC-EDUCATION

This paper develops a multicommunity model and analyzes policies that affect spending on public education and its distribution across commun ities. We find that policies that on net increase the fraction of the (relatively) wealthiest residents in the poorest community are welfare enhancing; policies that decrease this fraction can make all worse of f. Appropriately financed policies to (i) redistribute income toward t he poorest, (ii) increase spending on education in the poorest communi ty, and (iii) make the poorest community more attractive to relatively wealthier individuals, produce chain reactions in which the quality o f education increases and tax rates fall in all communities.