To Segregate or to Integrate: Education Politics and Democracy

The governments of nearly all countries are major providers of primary and secondary education to its citizens. In some countries, however, public schools coexist with private schools, while in others the government is the sole provider of education. In this study,we askwhy different societiesmake different choices regarding the mix of private and public schooling. We develop a theory which integrates private education and fertility decisionswith voting on public schooling expenditures. In a given political environment, high income inequality leads to more private education, as rich people opt out of the public system. Comparing across political systems, we find that concentration of political power can lead to multiple equilibria in the determination of public education spending.