Growth or stagnation? The role of public education
AbstractThis paper presents a political-economic theory of growth and human capital accumulation. Age heterogeneity is put forth as the primary source of disagreement between individuals over various levels public education expenditures. An overlapping generations model with with two-period lived agents is constructed to capture the heterogeneity. With a growing population, the equilibrium quantity of public education reflects the preferences of youth and is therefore foward looking. As such, policy preferences are a function of intertemporal elasticities, utility discounting and population growth. Despite foward looking behavior, it is shown that sufficiently rapid population growth can trigger stagnation (zero growth) in the form of a corner solution to the public policy problem. The model therefore complements existing models that associate slow per capita output growth with high population growth.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Development Economics.
Volume (Year): 64 (2001)
Issue (Month): 2 (April)
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Web page: http://www.elsevier.com/locate/devec
Other versions of this item:
- Kenneth Beauchemin, 1999. "Growth or Stagnation? The Role of Public Education," Discussion Papers 99-06, University at Albany, SUNY, Department of Economics.
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
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