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Government Bias in Education, Schooling Attainment, and Long‐Run Growth

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  • Parantap Basu
  • Keshab Bhattarai

Abstract

A surprising cross‐country stylized fact is that higher public spending on education tends to lower the long‐run growth rate of per capita GDP and the returns to schooling. This is contrary to the conventional wisdom that education is a major driver of growth. In this article, we revisit this issue and try to understand these puzzling facts in terms of an endogenous growth model. Our cross‐country calibration of the growth model predicts that countries with a greater government involvement in education experience lower schooling efforts and lower growth.

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  • Parantap Basu & Keshab Bhattarai, 2012. "Government Bias in Education, Schooling Attainment, and Long‐Run Growth," Southern Economic Journal, John Wiley & Sons, vol. 79(1), pages 127-143, July.
    • Handle: RePEc:wly:soecon:v:79:y:2012:i:1:p:127-143
    DOI: 10.4284/0038-4038-79.1.127
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