Enhancing Growth and Welfare through debt-financed Education

Peter Stauvermann and Ronald Kumar

MPRA Paper from University Library of Munich, Germany

Abstract: Using an over-lapping generations (OLG) model, we show how small open economies can enhance their growth through educational subsidies financed via public debt and reduce their fertility rate. We show that subsidizing education through public debt leads to a Pareto improvement of all generations. Even if a country is a net borrower in the international capital market, we show that this subsidy-policy can help, under certain conditions, to improve its net borrowing position. Especially, our analysis can be applied to less-developed countries.

Keywords: fertility; human capital; education subsidy; government debt. (search for similar items in EconPapers)
JEL-codes: H24 O1 O15 O41 (search for similar items in EconPapers)
Date: 2014-06
New Economics Papers: this item is included in nep-dge, nep-edu, nep-fdg and nep-gro
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Enhancing growth and welfare through debt-financed education (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:59455

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