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Infrastructure, Public Education and Growth with Congestion Costs

  • Pierre-Richard Agénor

type="main" xml:lang="en"> This paper studies the implications of education quality for the optimal allocation of public expenditure in a simple endogenous growth model with mandatory schooling and infrastructure spillovers. Education quality is inversely related to the degree of congestion in schools, which is itself measured in two ways: the proportions of teachers and students in the population, and the ratio of government spending on education to teaching capacity. The balanced-growth path is derived and the transitional dynamics associated with an increase in the degree of congestion are analysed. The growth-maximizing share of government spending on education is shown to depend negatively on the congestion parameter. Policy implications for the ‘quantity versus quality’ debate in schooling are also discussed.

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Paper provided by Economics, The University of Manchester in its series The School of Economics Discussion Paper Series with number 0524.

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Date of creation: 2005
Date of revision:
Handle: RePEc:man:sespap:0524
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