Education and Poverty in Vietnam: a Computable General Equilibrium Analysis
Marie-Hélène Cloutier,
John Cockburn and
Bernard Decaluwe (bdec@ecn.ulaval.ca)
Cahiers de recherche from CIRPEE
Abstract:
Education is often promoted as the solution to poverty in the developing world. Yet, fiscal discipline has led to reductions in public spending on education. We examine the poverty impacts of a cut in public subsidies to higher education, accompanied by corresponding tax cuts, in a general equilibrium framework applied to Vietnam. This policy is shown to have strong and complex impacts through various channels: a direct increase in the private costs of higher education, a reduction in education investments, a shift in the economy's skills mix in favor of unskilled workers, a rise in the wage premium for skilled workers, education and consumer price changes, etc. When all of these contrasting impacts are taken into account, we find that a higher education subsidy cut reduces welfare and increases poverty in Vietnam. While rural and agricultural households would benefit from this reform, urban and non-agricultural households would lose out.
Keywords: Computable general equilibrium model; public expenditures; education; Vietnam; welfare; poverty (search for similar items in EconPapers)
JEL-codes: C68 H42 H52 I21 I32 J24 O53 (search for similar items in EconPapers)
Date: 2008
New Economics Papers: this item is included in nep-edu, nep-hrm and nep-lab
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Citations: View citations in EconPapers (18)
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Persistent link: https://EconPapers.repec.org/RePEc:lvl:lacicr:0804
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