32 , 2015-08 , Graduate School of Economics and Osaka School of International Public Policy (OSIPP) Osaka University
This study presents a two-class, overlapping-generation model featuring social mobility inhibited by the mismatch of talents. Mobility decreases as the private education gap between the two classes widens, whereas it increases with an increased public education spending. Within this framework, we consider the redistributive politics of public education and show that the private education gap provides the government with an incentive to increase public education. We also show that social mobility reveals a cyclical motion across generations when the political power of the poor is weak.