Whether helps or harms growth was treated as settled twice, in opposite directions, within thirty years.
That history should induce caution about the current , whatever it is.
The early argument was that funds investment, because the rich save a larger share of their income.
It held in an economy where domestic saving constrained domestic investment.
Open capital markets weakened that link considerably, and the argument weakened with it.
The later argument points at and at demand, and it has the better evidence at present.
A child whose education depends on a parent's income represents a talent that the economy does not use.
is weaker where income concentrates, since a wealthy household spends a smaller fraction of an extra unit.
Both mechanisms are plausible and neither is easy to measure against a .
What has been established more firmly concerns rather than the level of .
Societies with a high correlation between a parent's income and a child's are not misallocating money but people.
The economic loss from that misallocation has been estimated and is large.
Housing has become the mechanism that converts income into opportunity .
A school is priced into a property, so education is purchased through a mortgage.
This makes housing supply an education policy, which is not how either is administered.
Redistribution through transfers is effective at reducing measured and weak at reducing this particular channel.
A transfer does not buy a place in a that has already been .
Supply, admission rules and transport do, and all three sit outside the ministry that owns the problem.