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Does a Generous Welfare State Crowd out Student Achievement? Panel Data Evidence from International Student Tests

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  • Torberg Falch
  • Justina A.V. Fischer

Abstract

Student achievement has been identified as important contributor to economic growth. This paper investigates the relationship between redistributive government activities and investment in human capital measured by student performance in international comparative tests in Mathematics and Science during the period 1980 to 2003. In fixed effects panel models, government consumption, government social expenditures, and the progressivity of the income tax system have negative effects on student achievement. We report results from a variety of model specifications and social expenditure components, and our best estimate indicates that increased government size by 10 percent reduces student achievement by 0.1 standard deviations.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2383.

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Date of creation: 2008
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Handle: RePEc:ces:ceswps:_2383

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Keywords: student achievement; welfare state; government size; tax system; panel data; international tests;

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