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Public Education and Growth in Developing Countries

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Author Info
Christiane Schuppert (University of Dortmund)
Nadja Wirz (University of St. Gallen)
Abstract

Human capital plays a key role in fostering technology adoption, the major source of economic growth in developing countries. Consequently, enhancing the level of human capital should be a matter of public concern. The present paper studies public education incentives in an environment in which governments can invest in human capital to facilitate the adoption of new technologies invented abroad or, instead, focus on consumptive public spending. Although human capital is pivotal for growth, the model reveals that incentives to invest in public education vanish if a country is poorly endowed with human capital. Rather, governments of these poorly-endowed countries focus on consumptive public spending. As a result, while their better-endowed counterparts build up human capital thereby promoting technology adoption and growth, the growth process in poorly-endowed countries stagnates.

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Publisher Info
Paper provided by Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics in its series EPRU Working Paper Series with number 08-04.

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Length: 18 pages
Date of creation: Oct 2008
Date of revision:
Handle: RePEc:kud:epruwp:08-04

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Related research
Keywords: growth; public education; human capital; technology adoption;

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Find related papers by JEL classification:
O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
H4 - Public Economics - - Publicly Provided Goods
F2 - International Economics - - International Factor Movements and International Business

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