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Does a generous welfare state crowd out student effort? Panel data evidence from international student tests

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  • Justina Fischer
  • Torberg Falch

Abstract

Student achievement has been identified as an important contributor to economic growth. This paper investigates the hypothesis that redistributive government activities have a negative effect on investment in human capital using data from international comparative student achievement tests in Mathematics and Science for over 70 countries during the period 1980 to 2003. In fixed effects models, the impact on student achievement of both government consumption and government social expenditures are negative and seem to be robust across different model specifications. The effect of social expenditures appears to be driven by spending on pensions and active labor market policies.

Suggested Citation

  • Justina Fischer & Torberg Falch, 2008. "Does a generous welfare state crowd out student effort? Panel data evidence from international student tests," TWI Research Paper Series 25, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
    • Handle: RePEc:twi:respas:0025
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    Cited by:

    1. Kangoh Lee, 2015. "Higher education expansion, tracking, and student effort," Journal of Economics, Springer, vol. 114(1), pages 1-22, January.

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    Keywords

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    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • I20 - Health, Education, and Welfare - - Education - - - General

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