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Publicly financed education in an endogenous growth model

Author

Listed:
  • John Creedy
  • Norman Gemmell

Abstract

Purpose - This paper aims to examine the growth effects of human capital investment achieved through publicly‐provided, compulsory education, financed from income and consumption taxes. Design/methodology/approach - Constructs an endogenous growth model for developing countries, based on human capital accumulation in which education is publicly provided and financed, and schooling is compulsory. Findings - Public investment in human and physical capital are financed from taxes on wage and capital income, and consumption. Semi‐reduced forms are obtained to examine the equilibrium growth properties of the model, allowing the steady‐state effects of fiscal policy to be derived. The specification of the human capital production function and the strength of labour supply effects are shown to be important for the magnitude of steady‐state outcomes. Simulations illustrate the model's steady‐state and transitional dynamic properties. Originality/value - Provides an analysis of the growth impact of state‐provided education.

Suggested Citation

  • John Creedy & Norman Gemmell, 2005. "Publicly financed education in an endogenous growth model," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 32(2), pages 114-131, April.
    • Handle: RePEc:eme:jespps:01443580510600904
    DOI: 10.1108/01443580510600904
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    Cited by:

    1. Pierre-Richard Agénor, 2012. "Infrastructure, Public Education And Growth With Congestion Costs," Bulletin of Economic Research, Wiley Blackwell, vol. 64(4), pages 449-469, October.
    2. Cosmin Enache, 2009. "Fiscal Policy And Economic Growth In Romania," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 1(11), pages 1-50.

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    More about this item

    Keywords

    Development; Taxation; Labour market; Education; Economic growth;
    All these keywords.

    JEL classification:

    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H4 - Public Economics - - Publicly Provided Goods
    • D5 - Microeconomics - - General Equilibrium and Disequilibrium

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