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Trade-offs and Payoffs of Investing in Human Development

Marco Sánchez Cantillo () and Martín Cicowiez ()

World Development, 2014, vol. 62, issue C, 14-29

Abstract: We apply a general equilibrium model to quantify economic and social payoffs from investing in human development. The analysis revolves around scenarios of public spending that allow four developing countries to meet targets of the Millennium Development Goals (MDGs). Public spending rises significantly to meet the targets by 2015. The ultimate effect on aggregate demand depends on the macroeconomic trade-offs of the financing source. The supply effect is that production factors accumulate and productivity rises as larger numbers of better-educated workers become employed. The magnitude of the GDP growth gains and options to magnify them after 2015 are identified.

Keywords: general equilibrium; macroeconomic analyses of human development; Millennium Development Goals; Latin America; Uganda and Yemen (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1016/j.worlddev.2014.04.012

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