Private versus public financing of education and endogenous growth

Jean-Pierre Vidal () and Michael Bräuninger ()
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Jean-Pierre Vidal: GREQAM, Centre National de la Recherche Scientifique, 2 rue de la Charité, 13002 Marseille, France

Journal of Population Economics, 2000, vol. 13, issue 3, 387-401

Abstract: This paper examines interactions between education policy and growth. The analysis is carried out in an OLG model with two types of individuals: skilled and unskilled. An increase in public education reduces private costs of education, increases the proportion of skilled individuals, and tends to promote growth. On the other hand, education spending crowds out physical capital and reduces learning-by-doing. A marginal increase in the education subsidy can lower growth. It is yet shown that pure public education maximizes the long-run growth rate. Importantly, a partial subsidy to education can result in lower growth than pure private education.

Keywords: Growth; ·; education; ·; inequality; ·; overlapping; generations (search for similar items in EconPapers)
JEL-codes: E10 F43 O40 O41 (search for similar items in EconPapers)
Date: 2000-09-11
Note: Received: 7 March 1999/Accepted: 25 November 1999
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Citations: View citations in EconPapers (19)

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Working Paper: Private Versus Public Financing of Education and Endogenous Growth (1999)
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