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The Long-Run Incidence of Government Spending on Education

Author

Listed:
  • Marian Krzyzaniak

    (Rice University)

  • Ebrahim Eris

    (Universidade de Sao Paulo, Brasil)

Abstract

The main concern of the paper is the study of the combined long-run incidence of a selected tax (on profits or on factor incomes), the proceeds of which are spent on education. The analysis is done with the help of a neo-classical growth model modified so as to incorporate Harrod-neutral technological change induced by such expenditures. The authors show that such a policy leads to burdens in the short run and gains in the long run for the economy. A set of necessary conditions for minimization of discounted burdens (measured both in terms of global income and consumption) is obtained. Distributional effects of the policies is the subject of the last section of the paper.

Suggested Citation

  • Marian Krzyzaniak & Ebrahim Eris, 1974. "The Long-Run Incidence of Government Spending on Education," Public Finance Review, , vol. 2(3), pages 330-351, July.
    • Handle: RePEc:sae:pubfin:v:2:y:1974:i:3:p:330-351
    DOI: 10.1177/109114217400200304
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    References listed on IDEAS

    as
    1. H. Uzawa, 1961. "Neutral Inventions and the Stability of Growth Equilibrium," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 28(2), pages 117-124.
    2. K. J. Arrow, 1971. "The Economic Implications of Learning by Doing," Palgrave Macmillan Books, in: F. H. Hahn (ed.), Readings in the Theory of Growth, chapter 11, pages 131-149, Palgrave Macmillan.
    3. D. W. Jorgenson & Z. Griliches, 1967. "The Explanation of Productivity Change," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 34(3), pages 249-283.
    4. Ryuzo Sato, 1963. "Fiscal Policy in a Neo-Classical Growth Model: An Analysis of Time Required for Equilibrating Adjustment," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 30(1), pages 16-23.
    5. Krzyzaniak, Marian, 1970. "Factor Substitution and the General Tax on Profits," Public Finance = Finances publiques, , vol. 25(4), pages 489-514.
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