Does Public Spending on Tertiary Education Increase Tertiary Enrollment? Evidence from a Large Panel of Countries

Herzer Dierk and Bala Patrick ()
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Herzer Dierk: Department of Economics, Helmut Schmidt University Hamburg, Holstenhofweg 85, 22043 Hamburg, Germany
Bala Patrick: Department of Economics, Helmut Schmidt University Hamburg, Holstenhofweg 85, 22043 Hamburg, Germany

Review of Economics, 2025, vol. 76, issue 1, 81-106

Abstract: This study provides a systematic review of the few existing studies on the impact of public tertiary education spending on tertiary enrollment. It identifies several shortcomings in this literature and reexamines this impact while addressing the identified shortcomings, which include: (i) using public expenditures on tertiary education per student as a measure of overall public expenditures on tertiary education, (ii) omitting public costs per student when estimating the impact of public tertiary education spending on tertiary enrollment, (iii) ignoring potential endogeneity, (iv) ignoring possible spurious correlations in large T panels due to non-stationary data, and (v) not controlling for common time effects. In contrast to previous studies, this study finds, based on panel data for up to 149 countries between 1997 and 2018, a significant positive impact of public spending on tertiary education on tertiary enrollment that is robust to several sensitivity checks.

Keywords: tertiary enrollment; public tertiary education spending; public costs per student; GMM (search for similar items in EconPapers)
JEL-codes: H52 I23 I28 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1515/roe-2024-0059

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