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Does a generous welfare state crowd out student effort? Panel data evidence from international student tests

Author

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  • Falch, Torberg

    (Department of Economics)

  • Fischer, Justina AV

    (Dept. of Economics, Stockholm School of Economics)

Abstract

Student achievement has been identified as an important contributor to economic growth. This paper investigates the hypothesis that redistributive government activities have a negative effect on investment in human capital using data from international comparative student achievement tests in Mathematics and Science for over 70 countries during the period 1980 to 2003. In fixed effects models, both the effects of government consumption and government social expenditures on student achievement are negative and seem to be robust across different model specifications. The effect of social expenditures appears to be driven by spending on pensions and active labor market policies.

Suggested Citation

  • Falch, Torberg & Fischer, Justina AV, 2008. "Does a generous welfare state crowd out student effort? Panel data evidence from international student tests," SSE/EFI Working Paper Series in Economics and Finance 694, Stockholm School of Economics.
    • Handle: RePEc:hhs:hastef:0694
    Note: Version: March 2008
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    Cited by:

    1. Kangoh Lee, 2015. "Higher education expansion, tracking, and student effort," Journal of Economics, Springer, vol. 114(1), pages 1-22, January.

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    More about this item

    Keywords

    achievement; welfare state; panel data; PISA; TIMSS;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • I20 - Health, Education, and Welfare - - Education - - - General

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