Investment in education: Some lessons from the international evidence for the Baltic states
The international empirical evidence on the economics of education reveals one central insight and two puzzles, which are all relevant for the case of the Baltic States. The central insight is that social rates of return to education tend to be higher than the social opportunity costs of capital, except for the case of higher education. Based on this microeconomic evidence, the case for public investment in education is well founded, especially at the primary and the secondary levels. The first puzzle is that at the macroeconomic level, the presumed positive link between increases in educational attainment and income growth is difficult to detect. One reason is that a high rate of absorption of well-educated workers by the government sector, typical for many developing countries, is likely to reduce the long-run growth rate. The second puzzle is that there is no clear link between higher spending on educational inputs and higher educational output in the form of improved performance of pupils. As it seems, higher spending on education is not sufficient to improve performance as long as inefficiencies in the schooling system remain. For the Baltic States, three basic lessons emerge from the international evidence: First, public investment in higher education does not show up as a top priority from a social point of view; second, the macroeconomic return to education could turn out to be low if better educated workers predominantly end up in the relatively large government sectors typical for the Baltic States. Third, the productivity of schooling could probably be improved, for instance by a different allocation of resources within the education sector. Most likely, such an outcome would require a fundamental reform of the schooling system itself, not only in the Baltic States.
|Date of creation:||1999|
|Contact details of provider:|| Postal: Kiellinie 66, D-24105 Kiel|
Phone: +49 431 8814-1
Fax: +49 431 8814528
Web page: http://www.ifw-kiel.de/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gundlach, Erich, 1995.
"The role of human capital in economic growth: New results and alternative interpretations,"
Kiel Working Papers
659 [rev.], Kiel Institute for the World Economy (IfW).
- Gundlach, Erich, 1995. "The role of human capital in economic growth: new results and alternative interpretations," Open Access Publications from Kiel Institute for the World Economy 30189, Kiel Institute for the World Economy (IfW).
- Gundlach, Erich, 1994. "The role of human capital in economic growth: New results and alternative interpretations," Kiel Working Papers 659, Kiel Institute for the World Economy (IfW).
- Malcolm D. Knight & Delano Villanueva & Norman Loayza, 1992.
"Testing the Neoclassical Theory of Economic Growth; A Panel Data Approach,"
IMF Working Papers
92/106, International Monetary Fund.
- Malcolm Knight & Norman Loayza & Delano Villanueva, 1993. "Testing the Neoclassical Theory of Economic Growth: A Panel Data Approach," IMF Staff Papers, Palgrave Macmillan, vol. 40(3), pages 512-541, September.
- Mikael Lindahl & Alan B. Krueger, 2001.
"Education for Growth: Why and for Whom?,"
Journal of Economic Literature,
American Economic Association, vol. 39(4), pages 1101-1136, December.
- Alan B. Krueger & Mikael Lindahl, 2000. "Education for Growth: Why and For Whom?," NBER Working Papers 7591, National Bureau of Economic Research, Inc.
- Alan B. Krueger & Mikael Lindahl, 2000. "Education for Growth: Why and For Whom?," Working Papers 808, Princeton University, Department of Economics, Industrial Relations Section..
- Lee, J.-W. & Barro, R.J., 1998.
"Schooling Quality in a Cross Section of Countries,"
659, Harvard - Institute for International Development.
- E. Gundlach & D. Rudman & L. Wossmann, 2002.
"Second thoughts on development accounting,"
Taylor & Francis Journals, vol. 34(11), pages 1359-1369.
- Gundlach, Erich & Rudman, Desmond & Wößmann, Ludger, 2002. "Second thoughts on development accounting," Munich Reprints in Economics 20436, University of Munich, Department of Economics.
- Gundlach, Erich & Rudman, Desmond & Wößmann, Ludger, 1998. "Second thoughts on development accounting," Kiel Working Papers 895, Kiel Institute for the World Economy (IfW).
- Eric A. Hanushek & Dongwook Kim, 1995. "Schooling, Labor Force Quality, and Economic Growth," NBER Working Papers 5399, National Bureau of Economic Research, Inc.
- Douglas Gollin, 2002.
"Getting Income Shares Right,"
Journal of Political Economy,
University of Chicago Press, vol. 110(2), pages 458-474, April.
- Pritchett, Lant & Filmer, Deon, 1999. "What education production functions really show: a positive theory of education expenditures," Economics of Education Review, Elsevier, vol. 18(2), pages 223-239, April.
- Mark Bils & Peter J. Klenow, 1998. "Does Schooling Cause Growth or the Other Way Around?," NBER Working Papers 6393, National Bureau of Economic Research, Inc.
- Benhabib, Jess & Spiegel, Mark M., 1994. "The role of human capital in economic development evidence from aggregate cross-country data," Journal of Monetary Economics, Elsevier, vol. 34(2), pages 143-173, October.
When requesting a correction, please mention this item's handle: RePEc:zbw:ifwkdp:333. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics)
If references are entirely missing, you can add them using this form.