The existence of non-elite private schools |
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| Affiliation: | 1. Texas Policy Evaluation Project, Austin, TX 78712, USA;2. Ibis Reproductive Health, Oakland, CA 94612, USA;3. Department of Obstetrics, Gynecology and Reproductive Sciences, University of California, San Francisco, San Francisco, CA 94110, USA;4. Department of Health Care Organization and Policy, School of Public Health, University of Alabama at Birmingham, Birmingham, AL 35294, USA;5. Population Research Center and the Department of Sociology, University of Texas at Austin, Austin, TX 78712, USA;1. Department of Mechanical and Materials Engineering, University of Nebraska, Lincoln, NE 68588, United States;2. Department of Mechanical Engineering, Jazan University, Gizan, Jazan, 45142, Saudi Arabia;3. School of Engineering, The University of Edinburgh, Edinburgh EH9 3FB, UK |
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| Abstract: | We provide an explanation to the puzzle of the existence of paid-for private schools that offer lower quality education than some tuition-free public alternatives. We consider a model of a city composed of two communities: the urban area and the suburbs. The suburban public school provides higher quality education at an implicit price: the higher tax burden plus a housing rent premium. If that price is high enough and the urban public school has a sufficiently low quality, intermediate income households live in the urban area and use a private school. Intermediate quality private schools, then, exist to serve these households' demand. Lower and higher income households use different quality public schools. Therefore, perfect income stratification across public and private education does not characterize this equilibrium. |
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