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

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  • Justina Fischer
  • Torberg Falch

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, the impact on student achievement of both government consumption and government social expenditures 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 Thurgauer Wirtschaftsinstitut, Universität Konstanz in its series TWI Research Paper Series with number 25.

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Date of creation: 2008
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Handle: RePEc:twi:respas:0025

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Keywords: Student achievement; welfare state; panel data; PISA; TIMSS;

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  1. Jerik Hanushek & Dennis Kimko, 2006. "Schooling, Labor-force Quality, and the Growth of Nations," Educational Studies, Higher School of Economics, issue 1, pages 154-193.
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  9. 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.
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  12. Fölster, Stefan & Henrekson, Magnus, 1998. "Growth Effects of Government Expenditure and Taxation in Rich Countries," Working Paper Series 503, Research Institute of Industrial Economics, revised 20 Jun 2000.
  13. 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.
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