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The macroeconomic implications of corruption in the choice to educate

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  • Shaw, Philip
  • Mauro, Joseph A.

Abstract

Educational corruption is a worldwide phenomenon, yet its macroeconomic implications are largely unknown. We formulate a fixed-price bribe model to explore the impact educational corruption may have on growth, income inequality and other factors. When using aggregate ability as our measure of growth, our model produces a v-shaped relationship between growth and corruption, suggesting that corruption is detrimental to growth at lower levels of bribery, but growth enhancing at greater levels. A cross-section of countries is used to empirically test our model and provides qualitative support for our modeling structure. Distributional analysis reveals that an increased prevalence of corruption leads to greater income inequality and reduces the ability of education to signal quality.

Suggested Citation

  • Shaw, Philip & Mauro, Joseph A., 2023. "The macroeconomic implications of corruption in the choice to educate," Economic Systems, Elsevier, vol. 47(2).
    • Handle: RePEc:eee:ecosys:v:47:y:2023:i:2:s0939362523000031
    DOI: 10.1016/j.ecosys.2023.101074
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • I2 - Health, Education, and Welfare - - Education
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption

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