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

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  • Torberg Falch
  • Justina AV Fischer

Abstract

Student achievement has been identified as important contributor to economic growth. This paper investigates the relationship between redistributive government activities and investment in human capital measured by student performance in international comparative tests in Mathematics and Science during the period 1980 to 2003. In fixed effects panel models, government consumption, government social expenditures, and the progressivity of the income tax system have negative effects on student achievement. We report results from a variety of model specifications and social expenditure components, and our best estimate indicates that increased government size by 10 percent reduces student achievement by 0.1 standard deviations.

Suggested Citation

  • Torberg Falch & Justina AV Fischer, 2008. "Does a generous welfare state crowd out student achievement? Panel data evidence from international student tests," TWI Research Paper Series 31, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
  • Handle: RePEc:twi:respas:0031
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    Cited by:

    1. Falch, Torberg & Fischer, Justina A.V., 2012. "Public sector decentralization and school performance: International evidence," Economics Letters, Elsevier, vol. 114(3), pages 276-279.

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    More about this item

    Keywords

    Student achievement; welfare state; government size; tax system; panel data; international tests;
    All these keywords.

    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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