Many economists accept that there is a tradeoff between productivity and equity. This tradeoff extends to public policy debates about funding for education. The issue is whether or not it is productive to devote society’s resources to improving human capital (and therefore life chances) for the disadvantaged. The author of the article summarized here argues that proponents of the productivity-equity tradeoff ignore the social costs of inequality. This article develops a model for optimizing educational resources that factors in the costs of inequality.
