EDUCATION, RENT SEEKING AND GROWTH

Binyamin Berdugo and Uri Meir
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Binyamin Berdugo: Department of Economics, Ben-Gurion University of the Negev
Uri Meir: Ben-Gurion University of the Negev

No 913, Working Papers from Ben-Gurion University of the Negev, Department of Economics

Abstract: This paper studies the role of education as a way of reducing private rent seeking activities and increasing output. In many underdeveloped economies, for most individuals, there is no private return to education. Nonetheless, according to this paper, governments are better off by investing in public education. We view education as a means to build personal character, thereby affecting macroeconomic long run equilibrium by reducing the number of individuals who are engaged in private rentseeking activities. We show that education is more efficient than ordinary law enforcement because it has a long-run effect. The policy implication of this result is that even when education does not increase human capital, compulsory schooling will be beneficial in pulling underdeveloped economies out of poverty.

Keywords: Rent Seeking; Decency; Education; Growth (search for similar items in EconPapers)
Pages: 37 pages
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:bgu:wpaper:0913

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