Armellini, Mauricio and Basu, Parantap (2010): Altrusim. Education Subsidy and Growth.
Download (333Kb) | Preview
An optimal education subsidy formula is derived using an overlapping generations model with parental altruism. The model predicts that public education subsidy is greater in economies with lesser parental altruism because a benevolent government has to compensate for the shortfall in private education spending of less altruistic parents with a finite life. On the other hand, growth is higher in economies with greater parental altruism. Cross-country regressions using the World Values Survey for altruism lend support to our model predictions. The model provides insights about the reasons for higher education subsidy in richer countries.
|Item Type:||MPRA Paper|
|Original Title:||Altrusim. Education Subsidy and Growth|
|Keywords:||Human Capital; Altrusim; Education Subsidy;|
|Subjects:||D - Microeconomics > D9 - Intertemporal Choice and Growth > D90 - General|
|Depositing User:||Parantap Basu|
|Date Deposited:||07. Jul 2010 09:02|
|Last Modified:||16. Feb 2013 20:42|
Alesina, A, Y Algan, P. Cahue, P. Giuliano (2010), Family Values and the Regulation of Labour, Memeo.
Andreoni, J. (2006). Philantropy. In ‘Handbook of the economics of giving, altruism and reciprocity’, Volume 1, North Holland. Edited by Kolm, S.-C. and Mercier Ythier, J.
Acemoglu, D., and Angrist, J. (1999). How large are Social Returns to Education? Evidence from Compulsory Schooling Laws. NBER Working Paper W7444.
Armellini, M (2009). Public Education, Growth and Political Regimes. PhD Thesis, Durham University, UK.
Azariadis, C., and Drazen, A. (1990). Threshold Externalities in Economic Development. Quarterly Journal of Economics CV, 501-526.
Bandyopadhyay , D and P. Basu (2001). Redistributive Tax and Growth in a Model with Discrete Occupational Choice. Australian Economic Papers, 40, 2, 2001, pp. 111-132.
Barro, R. J. (1997). Determinants of Economic Growth: A Cross-Country Empirical Study. Lionel Robbins Lectures, Cambridge, MA: MIT Press.
Benabou, R. (2002). Tax and Education Policy in a Heterogeneous Agent Economy: What Levels of Redistribution Maximize Growth and Efficiency? Econometrica, Vol. 70, No. 2, pp. 481-517
Bils, M., and Klenow, P. (2000). Does Schooling cause growth? American Economic Review 90, pp. 1160-1183.
Bouhga-Hagbe, J. (2006). Altruism and worker’s remittances: Middle East and Central Asia. IMF Working Paper WP/06/130.
Bräuninger, M., and Vidal, J. (2000). Private versus public financing of education and endogenous growth. Journal of Population Economics, Vol. 13, pp. 387-401.
Cameron, S., and Heckman, J. (1998). Life Cycle Schooling and Dynamic Selection Bias: Models and Evidence for Five Cohorts. NBER Working Papers 6385
Cameron, S., and Taber, C. (2000). Borrowing Constraints and the Returns to Schooling. NBER Working Paper W7761.
Castillo, M., and Carter, M. (2002). The economic impacts of altruism, trust and reciprocity: an experimental approach to social capital. Mimeo, University of Wisconsin-Madison.
Eckestein, Z., and Zilcha, I. (1994). The effects of compulsory schooling on growth, income distribution and welfare. Journal of Public Economics 54, pp. 339-359.
Glomm, G., and Ravikumar, B. (1992). Public versus private investment in human capital: endogenous growth and income inequality. Journal of Political Economy 100, 818-34.
Keane, M., and Wolpin, K. (2001). The effect of Parental Transfers and Borrowing Constraints on Educational Attainment. Penn Institute for Economic Research Working Paper 01-018.
Krueger, A., and Lindahl, M. (2000). Education for Growth: Why and For Whom? NBER Working Paper W7591.
Loury, G.C. (1981). Intergenerational Transfers and the Distribution of Earnings. Econometrica, 49, 4, pp. 848-857.
Lucas, R. (1988). On the Mechanics of Economic Development. Journal of Monetary Economics 22, pp. 3–42.
Perotti, R. (1993). Political Equilibrium, Income Distribution, and Growth. Review of Economic Studies, 60(4), pp. 755-776.
Rapoport, H and J-P Vidal (2007), Economic Growth and Endogenous Intergenerational Altrusim, Journal of Public Economics, 91, 1231-1246.
Saint-Paul, G., and Verdier, T. (1993). Education, Democracy and Growth. Journal of Development Economics, 42(2), pp. 399-407.
Shea, J. (2000). Does Parents’ Money Matter? Journal of Public Economics, 77(2), pp. 155-184.
Tamura, R. (1991). Income Convergence in an Endogenous Growth Model. Journal of Political Economy, 99(3), pp. 522-540.