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The Effectiveness of Education and Health Spending among Brazilian Municipalities

Author

Listed:
  • Luiz de Mello

    (OECD)

  • Mauro Pisu

    (OECD)

Abstract

This paper uses a large dataset combining census, household survey and budgetary data for nearly 4.000 Brazilian municipalities to estimate the impact of government spending on education and health outcomes. We deal with the multi-dimensional nature of the population’s social status by estimating structural equation models with latent variables using a limited-information two-stage least square (2SLS) estimator. Robustness of the baseline regressions to heterogeneity in the data is assessed on the basis of quantile regressions. The main empirical findings are that government spending is a powerful determinant of education outcomes, but this is not the case for health, and that spending on non-education programmes are also at least as important. In addition, there appears to be scope for gains in economies of scale in the provision of education and health care services, at least for selected segments of the conditional distribution of social outcomes. Finally, there are cross-sectoral effects in service delivery: health (education) outcomes affect the population’s education (health) status. This Working Paper relates to the 2009 OECD Economic Survey of Brazil (www.oecd.org/eco/surveys/brazil). L'efficacité des dépenses d'éducation et de santé des administrations municipales brésiliennes Ce document utilise une grande base de données combinant des informations issues des enquêtes réalisées auprès des ménages et des recensements, ainsi que les budgets de près de 4.000 municipalités brésiliennes pour estimer l’effet des dépenses des administrations publiques en matière d’éducation et de santé. Le caractère multidimensionnel des indicateurs sociaux est pris en compte par un modèle d’équation structurelle avec des variables latentes estimé par le double moindre carré à information limité. Des régressions quantiles ont été estimées pour évaluer la robustesse des résultats de base en tenant compte de l’hétérogénéité des données. Les principaux résultats sont que les dépenses des administrations publiques sont particulièrement déterminantes pour la performance de l’éducation mais pas de la santé et que les dépenses des programmes hors éducation sont aussi importantes. En outre, les résultats en matière de santé ont un impact sur les indicateurs d’éducation, et vice versa. Finalement, il apparaît que des économies d’échelle pourraient être exploitées pour la fourniture des services d’éducation et de santé au moins pour les collectivités situées sur certains segments de la distribution conditionnelle des résultats en matière d’éducation et santé. Ce Document de travail se rapporte à l’Étude économique de l’OCDE du Brésil, 2009 (www.oecd.org/eco/etudes/brésil).

Suggested Citation

  • Luiz de Mello & Mauro Pisu, 2009. "The Effectiveness of Education and Health Spending among Brazilian Municipalities," OECD Economics Department Working Papers 712, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:712-en
    DOI: 10.1787/222817104376
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    Citations

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    Cited by:

    1. D’Jamila Garcia & Francisco Simões & Leonor Bettencourt & Cecília Aguiar & Inês Alves Ferreira & Joana Mendonça & Carla Moleiro & Antonella Rocca & Vladislava Lendzhova, 2023. "Predictors of Secondary Education Completion across Portuguese Municipalities: Evidence from the 2009–2018 Period," Societies, MDPI, vol. 13(9), pages 1-17, August.
    2. Carl Grekou & Romain Perez, 2014. "Child Mortality in sub-Saharan Africa: Why Public Health Spending Matters," EconomiX Working Papers 2014-28, University of Paris Nanterre, EconomiX.
    3. Roland Craigwell & Danielle Bynoe & Shane Lowe, 2012. "The effectiveness of government expenditure on education and health care in the Caribbean," International Journal of Development Issues, Emerald Group Publishing Limited, vol. 11(1), pages 4-18, April.
    4. Marc Audi & Amjad Ali, 2023. "The Role of Environmental Conditions and Purchasing Power Parity in Determining Quality of Life among Big Asian Cities," International Journal of Energy Economics and Policy, Econjournals, vol. 13(3), pages 292-305, May.
    5. Gracia De Renteria, Pilar & Ferrer Perez, Hugo & Philippidis, George & Sanjuan Lopez, Ana Isabel, 2021. "Capturing the drivers of social SDGs: An econometric analysis of the dimensions of health and education," Conference papers 333271, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    6. Carl Grekou & Romain Perez, 2014. "Child Mortality in sub-Saharan Africa: Why Public Health Spending Matters," Working Papers hal-04141334, HAL.
    7. Sugeng Setyadi & Saharuddin Didu & Lili Indriyani & Ananda Kurnia Fitri & Anita Wiidiastuti, 2023. "Modeling Life Expectancy in Indonesia Using System GMM Model," Review of Applied Socio-Economic Research, Pro Global Science Association, vol. 25(1), pages 83-98, June.
    8. José Roberto Afonso & Sulamis Dain & Vivian Almeida & Kleber Castro & Ana Cecília Faveret, 2012. "Reflections on two decades of social-spending decentralization," Chapters, in: Giorgio Brosio & Juan P. Jiménez (ed.), Decentralization and Reform in Latin America, chapter 4, pages iii-iii, Edward Elgar Publishing.

    More about this item

    Keywords

    Brazil; Brésil; education; health care; latent variable; modèle d’équation structurelle; quantile regression; régression quantile; santé; structural equation modelling; variable latente; éducation;
    All these keywords.

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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