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

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Author Info
Falch, Torberg () (Department of Economics)
Fischer, Justina AV () (Dept. of Economics, Stockholm School of Economics)

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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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Publisher 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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Related research
Keywords: achievement; welfare state; panel data; PISA; TIMSS;

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Find related papers by JEL classification:
C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data
H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
I20 - Health, Education, and Welfare - - Education - - - General

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  5. 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. [Downloadable!] (restricted)
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  8. Eric A. Hanushek & Ludger Woessmann, 2007. "The Role of School Improvement in Economic Development," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
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  9. Glomm, Gerhard & Ravikumar, B, 1992. "Public versus Private Investment in Human Capital Endogenous Growth and Income Inequality," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 813-34, August.
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  11. 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. [Downloadable!] (restricted)
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  12. Jacobs, Bas, 2007. "Real options and human capital investment," Labour Economics, Elsevier, vol. 14(6), pages 913-925, December. [Downloadable!] (restricted)
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  13. Markus Froelich & Jean Bourdon & Katharina Michaelowa, 2007. "Teacher Shortages, Teacher Contracts and their Impact on Education in Africa," University of St. Gallen Department of Economics working paper series 2007 2007-20, Department of Economics, University of St. Gallen. [Downloadable!]
    Other versions:
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