VAT on school fees
human capital accumulation among private school students but offers the potential for long-term gains through investment in state education.
Inequality remains a major concern. While VAT is inherently regressive, its redistributive potential lies in its ability to enhance educational outcomes for the majority. Whether it narrows or widens the mobility gap depends on how revenue is allocated. Grounded in the Galor-Zeira framework and supported by Corak’s findings, this essay concludes that while the policy carries risks, it also presents a structural opportunity to improve overall socio-economic mobility in the UK, provided the state delivers on its promise of educational investment. Ultimately, with efficient redistribution, this reform could mark a turning point in equalizing educational opportunities for future generations.
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