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Does a generous welfare state crowd out student effort? Panel data evidence from international student tests

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  • Falch, Torberg

    () (Department of Economics)

  • Fischer, Justina AV

    () (Dept. of Economics, Stockholm School of Economics)

Abstract

Student achievement has been identified as an important contributor to economic growth. This paper investigates the hypothesis that redistributive government activities have a negative effect on investment in human capital using data from international comparative student achievement tests in Mathematics and Science for over 70 countries during the period 1980 to 2003. In fixed effects models, both the effects of government consumption and government social expenditures on student achievement are negative and seem to be robust across different model specifications. The effect of social expenditures appears to be driven by spending on pensions and active labor market policies.

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Bibliographic Info

Paper provided by Stockholm School of Economics in its series Working Paper Series in Economics and Finance with number 694.

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Length: 30 pages
Date of creation: 19 Mar 2008
Date of revision:
Handle: RePEc:hhs:hastef:0694

Note: Version: March 2008
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Keywords: achievement; welfare state; panel data; PISA; TIMSS;

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  1. Isaac Ehrlich & Jinyoung Kim, 2007. "Social Security and Demographic Trends: Theory and Evidence from the International Experience," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 10(1), pages 55-77, January.
  2. Agell, Jonas & Ohlsson, Henry & Thoursie, Peter Skogman, 2006. "Growth effects of government expenditure and taxation in rich countries: A comment," European Economic Review, Elsevier, vol. 50(1), pages 211-218, January.
  3. Fischer, Justina A.V., 2007. "The Impact of Direct Democracy on Public Education: Evidence for Swiss Students in Reading, Mathematics and Natural Science," Working Paper Series in Economics and Finance 688, Stockholm School of Economics.
  4. Jean Bourdon & Markus Frölich & Katharina Michaelowa, 2007. "Teacher Shortages, Teacher Contracts and their Impacton Education in Africa," Post-Print halshs-00150147, HAL.
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  6. Hanushek, Eric A. & Luque, Javier A., 2003. "Efficiency and equity in schools around the world," Economics of Education Review, Elsevier, vol. 22(5), pages 481-502, October.
  7. Fölster, Stefan & Henrekson, Magnus, 2000. "Growth Effects of Government Expenditure and Taxation in Rich Countries," Working Paper Series in Economics and Finance 391, Stockholm School of Economics.
  8. Jacobs, Bas, 2007. "Real options and human capital investment," Labour Economics, Elsevier, vol. 14(6), pages 913-925, December.
  9. Kneller, Richard & Bleaney, Michael F. & Gemmell, Norman, 1999. "Fiscal policy and growth: evidence from OECD countries," Journal of Public Economics, Elsevier, vol. 74(2), pages 171-190, November.
  10. Kerwin Kofi Charles & Ming-Ching Luoh, 2003. "Gender Differences in Completed Schooling," The Review of Economics and Statistics, MIT Press, vol. 85(3), pages 559-577, August.
  11. Ehrlich, Isaac & Zhong, Jian-Guo, 1998. "Social Security and the Real Economy: An Inquiry into Some Neglected Issues," American Economic Review, American Economic Association, vol. 88(2), pages 151-57, May.
  12. Hogan, Vincent & Walker, Ian, 2007. "Education choice under uncertainty: Implications for public policy," Labour Economics, Elsevier, vol. 14(6), pages 894-912, December.
  13. Eric A. Hanushek & Ludger Woessmann, 2007. "The Role of School Improvement in Economic Development," CESifo Working Paper Series 1911, CESifo Group Munich.
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