The macroeconomic implications of corruption in the choice to educate

Philip Shaw and Joseph A. Mauro

Economic Systems, 2023, vol. 47, issue 2

Abstract: Educational corruption is a worldwide phenomenon, yet its macroeconomic implications are largely unknown. We formulate a fixed-price bribe model to explore the impact educational corruption may have on growth, income inequality and other factors. When using aggregate ability as our measure of growth, our model produces a v-shaped relationship between growth and corruption, suggesting that corruption is detrimental to growth at lower levels of bribery, but growth enhancing at greater levels. A cross-section of countries is used to empirically test our model and provides qualitative support for our modeling structure. Distributional analysis reveals that an increased prevalence of corruption leads to greater income inequality and reduces the ability of education to signal quality.

Keywords: Educational corruption; Growth; Conditional moment test (search for similar items in EconPapers)
JEL-codes: D73 I2 O41 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecosys:v:47:y:2023:i:2:s0939362523000031

DOI: 10.1016/j.ecosys.2023.101074

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