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Trade-offs and Payoffs of Investing in Human Development

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  • Sánchez, Marco V.
  • Cicowiez, Martín

Abstract

We apply a general equilibrium model to quantify economic and social payoffs from investing in human development. The analysis revolves around scenarios of public spending that allow four developing countries to meet targets of the Millennium Development Goals (MDGs). Public spending rises significantly to meet the targets by 2015. The ultimate effect on aggregate demand depends on the macroeconomic trade-offs of the financing source. The supply effect is that production factors accumulate and productivity rises as larger numbers of better-educated workers become employed. The magnitude of the GDP growth gains and options to magnify them after 2015 are identified.

Suggested Citation

  • Sánchez, Marco V. & Cicowiez, Martín, 2014. "Trade-offs and Payoffs of Investing in Human Development," World Development, Elsevier, vol. 62(C), pages 14-29.
  • Handle: RePEc:eee:wdevel:v:62:y:2014:i:c:p:14-29
    DOI: 10.1016/j.worlddev.2014.04.012
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    References listed on IDEAS

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    Cited by:

    1. van Ruijven, Bas J. & O’Neill, Brian C. & Chateau, Jean, 2015. "Methods for including income distribution in global CGE models for long-term climate change research," Energy Economics, Elsevier, vol. 51(C), pages 530-543.
    2. Sunde, Tafirenyika, 2017. "Education Expenditure and Economic Growth in Mauritius: An Application of the Bounds Testing Approach," MPRA Paper 86667, University Library of Munich, Germany.
    3. Joshi, Devin K. & Hughes, Barry B. & Sisk, Timothy D., 2015. "Improving Governance for the Post-2015 Sustainable Development Goals: Scenario Forecasting the Next 50years," World Development, Elsevier, vol. 70(C), pages 286-302.
    4. Sánchez Cantillo, Marco Vinicio, 2015. "Macroeconomic trade-offs and external vulnerabilities of human development in Nicaragua," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.

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