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Public Education Spending and Economic Growth: The Governance Threshold Effect

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  • Salwa Trabelsi

    (ESSEC, University of Tunis)

Abstract

This paper aims to give reason to the mixed result between the public education spending and growth found largely by the empirical works and to confirm the nonlinear character of this relationship. Using cross countries data averaged during the period 1980-2013, and the structural threshold regression method STR (Kourtellos et al,. 2015) to investigate the heterogeneous effects of the public education spending on growth considering governance indicators as threshold variable, we obtain evidence that this expenditure contributes positively to the economic performance only if the country is above the threshold level and presents good governance otherwise the effect is negative.

Suggested Citation

  • Salwa Trabelsi, 2018. "Public Education Spending and Economic Growth: The Governance Threshold Effect," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 43(1), pages 101-124, March.
  • Handle: RePEc:jed:journl:v:43:y:2018:i:1:p:101-124
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    More about this item

    Keywords

    Education Expenditure; Governance; Economic Growth; Threshold Effects; Structural Threshold Regression STR;
    All these keywords.

    JEL classification:

    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • P46 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education

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