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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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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2010/wp-cesifo-2010-01/cesifo1_wp2917.pdf
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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. Devereux, Michael P. & Lockwood, Ben & Redoano, Michela, 2002. "Do Countries Compete over Corporate Tax Rates?," CEPR Discussion Papers 3400, C.E.P.R. Discussion Papers.
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  8. Axel Dreher & Jan-Egbert Sturm & Heinrich W. Ursprung, 2006. "The impact of globalization on the composition of government expenditures: Evidence from panel data," KOF Working papers 06-141, KOF Swiss Economic Institute, ETH Zurich.
  9. Cameron A. Shelton, 2007. "The Size and Composition of Government Expenditure," Wesleyan Economics Working Papers 2007-002, Wesleyan University, Department of Economics.
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  11. Hans-Werner Sinn, 2004. "Migration and Social Replacement Incomes: How to Protect Low-Income Workers in the Industrialized Countries Against the Forces of Globalization and Market Integration," CESifo Working Paper Series 1265, CESifo Group Munich.
  12. Alesina, Alberto F & Rodrik, Dani, 1991. "Distributive Politics and Economic Growth," CEPR Discussion Papers 565, C.E.P.R. Discussion Papers.
  13. 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.
  14. 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.
  15. Dani Rodrik, 1997. "Has Globalization Gone Too Far?," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 57, December.
  16. Shelton, Cameron A., 2007. "The size and composition of government expenditure," Journal of Public Economics, Elsevier, vol. 91(11-12), pages 2230-2260, December.
  17. Lee, Dwight R. & McKenzie, Richard B., 1989. "The International Political Economy of Declining Tax Rates," National Tax Journal, National Tax Association, vol. 42(1), pages 79-83, March.
  18. Axel Dreher, 2002. "Does Globalization Affect Growth?," Development and Comp Systems 0210004, EconWPA, revised 04 Feb 2003.
  19. Poutvaara, Panu & Kanniainen, Vesa, 2000. "Why invest in your neighbor? Social contract on educational investment," Munich Reprints in Economics 19797, University of Munich, Department of Economics.
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