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Higher education and economic development: can public funding restrain the returns from tertiary education?

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  • Paola Azar Dufrechou

    () (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona; Institute of Economics, Universidad de la República-Uruguay)

Abstract

This paper examines whether the contribution of tertiary education to economic growth and income per capita depends on the structure of public education budgets. The analysis resorts to a panel of 41 countries over the period 1970-2010. The empirical approach is based on system GMM regressions and Hierarchical Linear Models, which allow dealing with endogeneity concerns and parameter heterogeneity. The estimates show that budget imbalances against basic schooling seem to undermine the achievement of productivity gains from higher education.

Suggested Citation

  • Paola Azar Dufrechou, 2018. "Higher education and economic development: can public funding restrain the returns from tertiary education?," Working Papers wpdea1802, Department of Applied Economics at Universitat Autonoma of Barcelona.
  • Handle: RePEc:uab:wprdea:wpdea1802
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    References listed on IDEAS

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    1. Robert C. Feenstra & Robert Inklaar & Marcel P. Timmer, 2015. "The Next Generation of the Penn World Table," American Economic Review, American Economic Association, vol. 105(10), pages 3150-3182, October.
    2. Benhabib, Jess & Spiegel, Mark M., 2005. "Human Capital and Technology Diffusion," Handbook of Economic Growth,in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 13, pages 935-966 Elsevier.
    3. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    4. Ernesto Talvi & Pablo Serra & Nancy Birdsall & Howard Pack & Andrés Solimano & Barbara Stallings & Michael Gavin & Richard H. Sabot & Nora Lustig & Humberto Petrei & Sebastián Edwards & Ricardo Hausma, 1997. "Pathways to Growth: Comparing East Asia and Latin America," IDB Publications (Books), Inter-American Development Bank, number 65998 edited by Nancy Birdsall & Frederick Jaspersen, February.
    5. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 407-443.
    6. repec:idb:idbbks:377 is not listed on IDEAS
    7. Barro, Robert J. & Lee, Jong Wha, 2013. "A new data set of educational attainment in the world, 1950–2010," Journal of Development Economics, Elsevier, vol. 104(C), pages 184-198.
    8. Cantoni, Davide & Yuchtman, Noam, 2013. "The political economy of educational content and development: Lessons from history," Journal of Development Economics, Elsevier, vol. 104(C), pages 233-244.
    9. Ang, James B. & Madsen, Jakob B. & Rabiul Islam, Md., 2011. "The effects of human capital composition on technological convergence," Journal of Macroeconomics, Elsevier, vol. 33(3), pages 465-476, September.
    10. Castelló-Climent, Amparo & Mukhopadhyay, Abhiroop, 2013. "Mass education or a minority well educated elite in the process of growth: The case of India," Journal of Development Economics, Elsevier, vol. 105(C), pages 303-320.
    11. Cantoni, Davide & Yuchtman, Noam, 2012. "Educational Content, Educational Institutions and Economic Development: Lessons from History," Discussion Papers in Economics 12691, University of Munich, Department of Economics.
    12. repec:idb:brikps:65998 is not listed on IDEAS
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    More about this item

    Keywords

    tertiary education; public spending; economic growth; income per capita;

    JEL classification:

    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General

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