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Impact of increased public education spending on growth and poverty in Uganda. An integrated micro-macro approach

Author

Listed:
  • Véronique Robichaud
  • Luca Tiberti
  • Hélène Maisonnave

Abstract

The objective of this paper is to assess the impact of increased public expenditures in education on school participation, skill level of the workforce, occupational choices between self‐employed and wage earners, economic performance, poverty reduction and income distribution. These additional expenditures in education are financed either through increased indirect taxes, or using the funds to be generated by the exploitation of oil resources. The best suited tool to evaluate the impact of such policies and financing mechanisms on the economy is a computable general equilibrium model (CGE) as this type of tool takes into account the interactions between all of the actors of an economy in a consistent framework. Impacts on prices, volumes and school performance will affect differently the households and thus, in order to compute how these results will affect the income distribution and poverty, a micro model is needed as well. Standard CGE models do not explicitly set out the relationship between education spending, school performance, skill level of workers and their choices on the labor market. Hence, we suggest using an integrated dynamic macro‐micro approach that models those important linkages, where a detailed schooling module is developed at both the macro and micro level to track the transition of students into the skilled and unskilled labor markets.

Suggested Citation

  • Véronique Robichaud & Luca Tiberti & Hélène Maisonnave, 2014. "Impact of increased public education spending on growth and poverty in Uganda. An integrated micro-macro approach," Working Papers MPIA 2014-01, PEP-MPIA.
  • Handle: RePEc:lvl:mpiacr:2014-01
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    More about this item

    Keywords

    Child Poverty; Education; Dynamic General Equilibrium; Micro-Simulation; Uganda;

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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