Education Systems, Growth and Welfare

Nikos Benos ()

University of Cyprus Working Papers in Economics from University of Cyprus Department of Economics

Abstract: This paper focuses on the implications of Decentralized Education (DE) and Centralized Public Education (CPE) for growth and welfare in an overlapping generations model. Individuals choose learning time, consumption and human capital. Under DE, there is no government intervention, while in CPE, human capital is augmented by public education expenditures financed by a distortionary income tax, where the latter is chosen by a benevolent fiscal authority. CPE is welfare superior to DE for moderate/strong preferences over human capital bequests and medium/high elacticities of human capital with respect to average public education spending, average and parental human capital. So, even if we abstract from equity considerations, education policy may be supported on welfare grounds

Keywords: Economic development; Educational Finance; National Government expenditures and education (search for similar items in EconPapers)
Pages: 30 pages
Date: 2005-09
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Persistent link: https://EconPapers.repec.org/RePEc:ucy:cypeua:5-2005

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