Abstract
This thesis mainly investigates the relationship between human capital accumulation and income distribution, focusing on the opportunities and costs of higher education. Then, research how the university system influences income inequality by understanding the current situation of public and private universities and discussing universities rankings and the reasons. We use two techniques. First, we collect related data to find the reasons why the ranking of public universities is better than that of private universities in Taiwan. Secondly, we build a model by modifying Galor model (2011). Galor divided labors into skilled labors and unskilled labors. We farther divide skilled labors into two groups, people who receive public education and who receive private education. In our model, we set the tuition of private universities is higher than that of public universities and the possibility of receiving public education is equal for everyone. Under these premises, we desire to know how income inequality changes. After deriving the model, we find out the opportunities and costs of higher education does influences income distribution. In the short run, public and private education would make income distribution worse. However, if the possibility of receiving public education is equal, then the situation of income inequality will be improved in the long run.