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Simulating the impact of a raise in education salaries on economic growth in Peru

Author

Listed:
  • Paredes Chervellini, Luciano

    (UNU-MERIT, Maastricht University, and ComexPeru)

  • Ritzen, Jo

    (UNU-MERIT, Maastricht University)

Abstract

A simulation shows that increasing teacher salaries is likely to be (very) profitable for Peru. The required investments have in the long run a substantial return in economic growth as higher salaries would lead to higher teacher cognitive skills, which in turn impact student achievement. We suggest that international development banks should develop products for education finance with a long period (60 years or more) before repayments must be made.

Suggested Citation

  • Paredes Chervellini, Luciano & Ritzen, Jo, 2021. "Simulating the impact of a raise in education salaries on economic growth in Peru," MERIT Working Papers 2021-029, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2021029
    as

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    File URL: https://unu-merit.nl/publications/wppdf/2021/wp2021-029.pdf
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    References listed on IDEAS

    as
    1. Hendricks, Matthew D., 2015. "Towards an optimal teacher salary schedule: Designing base salary to attract and retain effective teachers," Economics of Education Review, Elsevier, vol. 47(C), pages 143-167.
    2. Eric A. Hanushek & Marc Piopiunik & Simon Wiederhold, 2019. "The Value of Smarter Teachers: International Evidence on Teacher Cognitive Skills and Student Performance," Journal of Human Resources, University of Wisconsin Press, vol. 54(4), pages 857-899.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Education; Return over investment; Economic growth; GDP; PISA; Cognitive Skills; Teachers; Development finance;
    All these keywords.

    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O21 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Planning Models; Planning Policy
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
    • N36 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Latin America; Caribbean

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