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Should we raise public expenditure on basic education and reduce expenditure at college?

Author

Listed:
  • Marisa Hidalgo-Hidalgo

    (Department of Economics, Universidad Pablo de Olavide)

  • Iñigo Iturbe-Ormaetxe

    (Department of Economics, Universidad de Alicante)

Abstract

This paper analyzes public intervention in education, taking into account the existence of two educational levels: basic education and college education. The government decides per capita expenditure at each level and the subsidy for college education. We explore the effect of transferring money from one level to the other on equity and efficiency. We find that there is always a policy reform that satisfies both the objectives of equity and efficiency, where efficiency refers to average productivity of college graduates. For developed countries, this policy consists of transferring resources from college education to basic education.

Suggested Citation

  • Marisa Hidalgo-Hidalgo & Iñigo Iturbe-Ormaetxe, 2008. "Should we raise public expenditure on basic education and reduce expenditure at college?," Working Papers 08.11, Universidad Pablo de Olavide, Department of Economics.
    • Handle: RePEc:pab:wpaper:08.11
    as

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    References listed on IDEAS

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    3. Lloyd-Ellis, Huw, 2000. "Public Education, Occupational Choice, and the Growth-Inequality Relationship," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 41(1), pages 171-201, February.
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    More about this item

    Keywords

    Basic education; college education; public expenditure in education.;
    All these keywords.

    JEL classification:

    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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