EconPapers    
Economics at your fingertips  
 

How to Promote R&D-based Growth? Public Education Expenditure on Scientists and Engineers versus R&D Subsidies

Volker Grossmann ()

No 1225, CESifo Working Paper Series from CESifo Group Munich

Abstract: Empirical evidence suggests that positive externalities from R&D exceed negative ones. According to conventional wisdom, this calls for R&D subsidies. This paper develops a quality-ladder growth model with overlapping generations which evaluates the positive and normative implications of R&D subsidies and compares them with the effects of public education policy to promote R&D. Unlike standard growth models, the proposed framework accounts for the specificity of science and engineering (S&E) skills, where individuals endogenously choose the type of education, and allows for heterogeneity in individual ability. Although intertemporal knowledge spillovers are hypothesized and negative R&D externalities are absent, the analysis shows somewhat surprisingly that R&D subsidies may be detrimental to both productivity growth and welfare, in contrast to publicly provided education targeted to S&E skills. Finally, the optimal structure of public education spending on different skills is examined.

Keywords: education policy; endogenous growth; R&D subsidies; scientists and engineers; skill specificity (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev and nep-ino
Date: 2004
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7) Track citations by RSS feed

Downloads: (external link)
https://www.cesifo-group.de/DocDL/cesifo1_wp1225.pdf (application/pdf)

Related works:
Journal Article: How to promote R&D-based growth? Public education expenditure on scientists and engineers versus R&D subsidies (2007) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_1225

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Group Munich Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().

 
Page updated 2019-10-14
Handle: RePEc:ces:ceswps:_1225