Educational Systems, Intergenerational Mobility and Social Segmentation

We show that the very characteristics of educational systems generate social segmentation. A stylised educational framework is constructed in which everyone receives a compulsory basic education and can subsequently choose between direct working, vocational studies and university. There is a selection for entering the university which consists of a minimum human capital level at the end of basic education. In the model, an individual's human capital depends (i) on her/his parents' human capital, (ii) on her/his schooling time, and (iii) on public expenditure for education. There are three education functions corresponding to each type of study (basic, vocational, university). Divergences in total educational expenditure, in its distribution between the three studies and in the selection severity, combined with the initial distribution of human capital across individuals, can result in very different social segmentations and generate under education traps (situations in which certain dynasties remain unskilled from generation to generation) at the steady state. We finally implement a series of simulations that illustrate these findings in the cases of egalitarian and elitist educational systems. Assuming the same initial distribution of human capital between individuals, we find that the first system results in two-segment stratification, quasi income equality and no under education trap whereas the elitist system generates three segments, significant inequality and a large under education trap