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Altruism, Education Subsidy and Growth

Mauricio Armellini and Parantap Basu

EERI Research Paper Series from Economics and Econometrics Research Institute (EERI), Brussels

Abstract: An optimal education subsidy formula is derived using an overlapping generations model with parental altruism. The model predicts that public education subsidy is greater in economies with lesser parental altruism because a benevolent government has to compensate for the shortfall in private education spending of less altruistic parents with a finite life. On the other hand, growth is higher in economies with greater parental altruism. Cross-country regressions using the World Values Survey for altruism lend support to our model predictions. The model provides insights about the reasons for higher education subsidy in richer countries.

Keywords: Altrusim; Education Subsidy; Human Capital; Growth. (search for similar items in EconPapers)
JEL-codes: D9 (search for similar items in EconPapers)
Date: 2010-08-21
New Economics Papers: this item is included in nep-dev, nep-dge, nep-edu, nep-fdg, nep-hrm, nep-lab and nep-soc
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http://www.eeri.eu/documents/wp/EERI_RP_2010_21.pdf (application/pdf)

Related works:
Working Paper: Altruism, Education Subsidy and Growth (2011) Downloads
Working Paper: Altrusim. Education Subsidy and Growth (2010) Downloads
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