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Rapid demographic change and the allocation of public education resources: Evidence from East Germany

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  • Kempkes, Gerhard

Abstract

We analyse the adjustment of public education spending in response to rapidly decreasing student cohorts in East Germany where birth rates collapsed after German reunification. Previous results from the literature based on data from more stable demographic periods suggest that public resources are incompletely adjusted, and that large reductions in the student population would thus translate into major increases in spending per student. Our empirical analysis suggests, however, that resource adjustments in East Germany have been considerable, especially in the years when student cohorts actually decreased. Adjustments were less tight when student numbers began to stagnate. Although our results are restricted to public education, they may be interpreted as early evidence on fiscal adjustments during strong demographic change, which will play a growing role in the years to come.

Suggested Citation

  • Kempkes, Gerhard, 2010. "Rapid demographic change and the allocation of public education resources: Evidence from East Germany," Discussion Paper Series 1: Economic Studies 2010,16, Deutsche Bundesbank.
    • Handle: RePEc:zbw:bubdp1:201016
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    1. Wo[ss]mann, Ludger & West, Martin, 2006. "Class-size effects in school systems around the world: Evidence from between-grade variation in TIMSS," European Economic Review, Elsevier, vol. 50(3), pages 695-736, April.
    2. Foreman-Peck, James & Foreman-Peck, Lorraine, 2006. "Should schools be smaller? The size-performance relationship for Welsh schools," Economics of Education Review, Elsevier, vol. 25(2), pages 157-171, April.
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    Cited by:

    1. Britta Stöver, 2012. "Reallocation of Purchasing Power due to Demographic Change - The Case of North Rhine-Westphalia," GWS Discussion Paper Series 12-1, GWS - Institute of Economic Structures Research.

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    More about this item

    Keywords

    Subnational government spending; demographic change; public education;
    All these keywords.

    JEL classification:

    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures

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