Educate or adjudicate? Socioeconomic heterogeneity and welfare

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dc.citation.epage510en_US
dc.citation.issueNumber5en_US
dc.citation.spage491en_US
dc.citation.volumeNumber28en_US
dc.contributor.authorNeyapti, B.en_US
dc.date.accessioned2018-04-12T11:05:42Z
dc.date.available2018-04-12T11:05:42Zen_US
dc.date.issued2017en_US
dc.departmentDepartment of Economicsen_US
dc.description.abstractI present a formal framework to explore the welfare and distributional effects of a government’s optimal choice over two types of public spending in a closed economy: domestic security (DS) and investment in social capital (SC). Production is characterized as a function of social and physical capital stocks that both vary across the regions. DS stands for total factor productivity, while SC stands for human capital and civic cooperativeness combined. SC accumulates via public spending on universal primary education, cultural, and civic events and such, and is exposed to regional spillover effects. Numerical simulations of the static solution of the government’s welfare maximization problem reveal that the optimal rate of spending on SC (m*) is negatively related with the income share of physical capital, SC spillovers and fiscal decentralization. Simulations also show that SC homogeneity is positively associated with both the level and equitability of aggregate income. The maximum attainable levels of income, welfare and social cohesion and the most equitable incomes are all observed to realize at some intermediate range of m* values. In case DS augments SC, however, social cohesion improves and welfare declines monotonously in m*. © 2016 Informa UK Limited, trading as Taylor & Francis Group.en_US
dc.identifier.doi10.1080/10242694.2016.1247775en_US
dc.identifier.eissn1476-8267
dc.identifier.issn1024-2694
dc.identifier.urihttp://hdl.handle.net/11693/37198en_US
dc.language.isoEnglishen_US
dc.publisherRoutledgeen_US
dc.relation.isversionofhttp://dx.doi.org/10.1080/10242694.2016.1247775en_US
dc.source.titleDefence and Peace Economicsen_US
dc.subjectDomestic security spendingen_US
dc.subjectEconomic developmenten_US
dc.subjectIncome equalityen_US
dc.subjectSocial Capitalen_US
dc.titleEducate or adjudicate? Socioeconomic heterogeneity and welfareen_US
dc.typeArticleen_US

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