Composition of Government Expenditures and Demand for Education in Developing Countries
IMF Working Papers, May 1, 2002
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- Composition of Government Expenditures and Demand for Education in Developing Countries
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Bibliographic details
- Authors: John J Matovu, Era Dabla-Norris
- Published: May 1, 2002
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451850116.001
Summary
- Paper addresses potential effects on human capital accumulation and economic growth of alternative compositions of public expenditures.
- Uses a computable dynamic general equilibrium model of overlapping generations and heterogeneous agents in which altruistic parents make schooling decisions for their children.
- Model includes fixed and variable costs for different levels of schooling.
- Main synthesized results:
- Reducing household costs of primary education has the largest positive impact on growth and poverty reduction in the short run.
- An increase in higher education spending increases long-run growth.
- These effects can be substantial even when increasing education spending comes at the expense of public infrastructure investment.
Model and Scope
- Framework: computable dynamic general equilibrium model of overlapping generations and heterogeneous agents.
- Behavioral assumption: altruistic parents choose schooling for their children.
- Cost structure: presence of fixed and variable costs for different levels of schooling.
- Geographic and topical coverage (as indexed in the source): East Asia; South Asia; Sub-Saharan Africa; Middle East, North Africa; low income; education; Education spending; Government expenditures; Human capital; growth; income; labor; national accounts.
Key Findings and Statistics
- Short-run: reducing household costs of primary education yields the largest positive impact on growth and poverty reduction.
- Long-run: increased spending on higher education raises long-run growth.
- Trade-offs: positive education effects can be substantial even when education spending increases at the expense of public infrastructure investment.
- Publication-specific numeric details:
- Pages: 47
- Volume: 2002
- Issue: 078
- Series: Working Paper No. 2002/078
- Stock No: WPIEA0782002
- ISBN: 9781451850116
- ISSN: 1018-5941
- DOI: https://doi.org/10.5089/9781451850116.001
- Publication date: May 1, 2002
- Authors: John J Matovu, Era Dabla-Norris
Policy Implications and Recommendations
- Prioritize interventions that reduce household costs of primary education to achieve the largest short-run gains in growth and poverty reduction.
- Maintain or increase higher education spending to support long-run economic growth.
- When reallocating public expenditures, consider that sizable benefits from shifting toward education can materialize even if accompanied by reductions in public infrastructure investment.
IMF Working Papers — Composition of Government Expenditures and Demand for Education in Developing Countries, John J Matovu and Era Dabla-Norris, May 1, 2002, DOI: https://doi.org/10.5089/9781451850116.001
Content in this bundle
- Composition of Government Expenditures and Demand for Education in Developing Countries - WP/02/78