We assess the merits of different education systems in a framework
that accounts for the joint decision problem of parents regarding
fertility and education. Specifically, we compare the implications
of a public and a private schooing regime for economic growth and
inequality; We find that private schooling leads to higher growth
when there is little inequality in human capital endowments across
families. In contrast, when inequality is high, public education
yields higher growth by reducing fertility differentials. In
addition, public schooling leads to income convergence, while
private schooling can result in ever increasing inequality. Our
analysis highlights the importance of accounting for endogenous
fertility differentials when analyzing educational policies.