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Public expenditures on education and income distribution in Colombia (Inglês)

The public financing of education in Columbia contributes to the redistribution of income from the rich to the poor. This impact is more decisive in urban than rural areas because of the strong propensity of higher income groups in urban areas to enroll their children in fee-paying private schools. On the regional level, the combined effect of the taxation and transfers policies of the central government is to redistribute public funds for primary education from the richer to the poorer departments. This conclusion holds even when municipal expenditures are considered. The net incidence of the public financing of education on income results from the comparison between the degree of progressivity of the tax system and that of education subsidies. Any policy action aimed at making a system of finance more equitable may act on either the structure of subsidies or the structure of taxation. The impact of public financing of secondary and higher education is subsidization of the middle class by both the poor and the very rich. A special tax earmarked for the financing of secondary and higher education should alleviate this problem, provided that the progressivity of such a tax is stronger than that of the existing tax system.




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