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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 AV 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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Bibliographic Info

Paper provided by Thurgauer Wirtschaftsinstitut, Universität Konstanz in its series TWI Research Paper Series with number 31.

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Date of creation: 2008
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Handle: RePEc:twi:respas:0031

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

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  1. 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.
  2. Laibson, David I., 1997. "Golden Eggs and Hyperbolic Discounting," Scholarly Articles 4481499, Harvard University Department of Economics.
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