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Globalization, Redistribution, and the Composition of Public Education Expenditures

  • Thushyanthan Baskaran
  • Zohal Hessami

We analyze whether globalization affects the composition of public expenditures for education by integrating arguments from the Heckscher-Ohlin and the tax competition literature into a common theoretical framework. The model suggests that with increasing global integration, developing countries have strong incentives to shift public education expenditures towards lower education. In industrialized countries, on the other hand, globalization has an ambiguous effect on the composition of public education expenditures. We test and confirm these hypotheses with data on 86 countries over the 1999-2006 period.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2917.

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Date of creation: 2010
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Handle: RePEc:ces:ceswps:_2917
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  1. Alberto Alesina & Dani Rodrik, 1994. "Distributive Politics and Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 109(2), pages 465-490.
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  16. Panu Poutvaara & Vesa Kanniainen, 2000. "Why Invest in Your Neighbor? Social Contract on Educational Investment," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 7(4), pages 547-562, August.
  17. Eric Hanushek & Charles Ka Yui Leung & Kuzey Yilmaz, 2001. "Redistribution through Education and Other Transfer Mechanisms," NBER Working Papers 8588, National Bureau of Economic Research, Inc.
  18. Cameron A. Shelton, 2007. "The Size and Composition of Government Expenditure," Wesleyan Economics Working Papers 2007-002, Wesleyan University, Department of Economics.
  19. Rudra, Nita, 2002. "Globalization and the Decline of the Welfare State in Less-Developed Countries," International Organization, Cambridge University Press, vol. 56(02), pages 411-445, March.
  20. Nicolas Couderc, 2007. "GRUBBS: Stata module to perform Grubbs' test for outliers," Statistical Software Components S456803, Boston College Department of Economics, revised 29 Jan 2007.
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