Altrusim. Education Subsidy and Growth

Mauricio Armellini and Parantap Basu

MPRA Paper from University Library of Munich, Germany

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: Human Capital; Altrusim; Education Subsidy (search for similar items in EconPapers)
JEL-codes: D90 (search for similar items in EconPapers)
Date: 2010-07-03
New Economics Papers: this item is included in nep-dge, nep-fdg, nep-hrm and nep-soc
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Related works:
Working Paper: Altruism, Education Subsidy and Growth (2011)
Working Paper: Altruism, Education Subsidy and Growth (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:23653

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