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The Impact of Cutting Education Expenditures: The Case of Mexico in the 1980s

  • Francisco Perez-Arce
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    This paper studies the impact of expenditures on the returns to schooling within a context of dramatic reductions in public spending. The author matches data on expenditures and pupil-teacher ratios from Mexico in the 1980s with individual earnings in 2007/2008 and find that the returns to education among individuals that went to poorly funded schools are lower than among those that went to better funded ones. He determines that within-state changes in educational expenditures and pupil-teacher ratios predict changes in the returns to education.

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    File URL: http://www.rand.org/content/dam/rand/pubs/working_papers/2011/RAND_WR845.pdf
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    Paper provided by RAND Corporation Publications Department in its series Working Papers with number 845.

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    Length: 43 pages
    Date of creation: Mar 2011
    Date of revision:
    Handle: RePEc:ran:wpaper:845
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    1. Link, Charles & Ratledge, Edward & Lewis, Kenneth, 1980. "The Quality of Education and Cohort Variation in Black-White Earnings Differentials: Reply," American Economic Review, American Economic Association, vol. 70(1), pages 196-203, March.
    2. Ferreira, Francisco H. G. & Schady, Norbert, 2008. "Aggregate economic shocks, child schooling and child health," Policy Research Working Paper Series 4701, The World Bank.
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