Impact of increased public education spending on growth and poverty in Uganda. An integrated micro-macro approach

Véronique Robichaud, Luca Tiberti and Hélène Maisonnave

Working Papers MPIA from PEP-MPIA

Abstract: The objective of this paper is to assess the impact of increased public expenditures in education on school participation, skill level of the workforce, occupational choices between self‐employed and wage earners, economic performance, poverty reduction and income distribution. These additional expenditures in education are financed either through increased indirect taxes, or using the funds to be generated by the exploitation of oil resources. The best suited tool to evaluate the impact of such policies and financing mechanisms on the economy is a computable general equilibrium model (CGE) as this type of tool takes into account the interactions between all of the actors of an economy in a consistent framework. Impacts on prices, volumes and school performance will affect differently the households and thus, in order to compute how these results will affect the income distribution and poverty, a micro model is needed as well. Standard CGE models do not explicitly set out the relationship between education spending, school performance, skill level of workers and their choices on the labor market. Hence, we suggest using an integrated dynamic macro‐micro approach that models those important linkages, where a detailed schooling module is developed at both the macro and micro level to track the transition of students into the skilled and unskilled labor markets.

Keywords: Child Poverty; Education; Dynamic General Equilibrium; Micro-Simulation; Uganda (search for similar items in EconPapers)
JEL-codes: C50 D58 I32 O55 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-afr, nep-cmp and nep-edu
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:lvl:mpiacr:2014-01

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