Public Expenditure on Education and Skill Formation: Is There a Simple Rule to Maximize Skills?
AbstractThe ratio of skill to unskilled labour stocks in the economy is widely acknowledged to have an important role for development. Can education policy affect the evolution of this ratio? This paper shows that it can, and it also shows that the actual effect of education policy depends on the allocation rule of the budget across educational levels. The consideration of a stylized hierarchical education model allows us to develop analytical conditions under which the allocation rule favours the accumulation of skills. The analysis has implication for policy makers in developing countries, where skill formation is much needed, because it shows that observed allocation rules usually violate the maximization condition by the assignment of higher-than-optimal resources to higher education.
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Bibliographic InfoPaper provided by Department of Economics - dECON in its series Documentos de Trabajo (working papers) with number 0611.
Length: 15 pages
Date of creation: Feb 2011
Date of revision:
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More information through EDIRC
education budget; skills accumulation;
Other versions of this item:
- Patron, Rossana & Vaillant, Marcel, 2011. "Public expenditure on education and skill formation: is there a simple rule to maximize skills?," MPRA Paper 46740, University Library of Munich, Germany.
- I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
- I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
- I2 - Health, Education, and Welfare - - Education
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-08-22 (All new papers)
- NEP-EDU-2011-08-22 (Education)
- NEP-LAB-2011-08-22 (Labour Economics)
- NEP-LAM-2011-08-22 (Central & South America)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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