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Should we raise public expenditure on basic education and reduce expenditure at college?

Marisa Hidalgo-Hidalgo () and Inigo Iturbe-Ormaetxe ()

No 08.11, Working Papers from Universidad Pablo de Olavide, Department of Economics

Abstract: This paper analyzes public intervention in education, taking into account the existence of two educational levels: basic education and college education. The government decides per capita expenditure at each level and the subsidy for college education. We explore the effect of transferring money from one level to the other on equity and efficiency. We find that there is always a policy reform that satisfies both the objectives of equity and efficiency, where efficiency refers to average productivity of college graduates. For developed countries, this policy consists of transferring resources from college education to basic education.

Keywords: Basic education; college education; public expenditure in education. (search for similar items in EconPapers)
JEL-codes: H52 I28 J24 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2008-11
New Economics Papers: this item is included in nep-edu, nep-hrm and nep-lab
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