## Composition of Government Expenditures and Demand for Education in Developing Countries

_IMF Working Papers, May 1, 2002_

## Source details

**Canonical URL:** [Composition of Government Expenditures and Demand for Education in Developing Countries](https://www.imf.org/en/publications/wp/issues/2016/12/30/composition-of-government-expenditures-and-demand-for-education-in-developing-countries-15733)

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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

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### 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*

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## Content in this bundle

- **Composition of Government Expenditures and Demand for Education in Developing Countries - WP/02/78**
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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/30/composition-of-government-expenditures-and-demand-for-education-in-developing-countries-15733_