Armellini, Mauricio and Basu, Parantap (2010): Altrusim. Education Subsidy and Growth.
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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 > D90 - General|
|Depositing User:||Parantap Basu|
|Date Deposited:||07. Jul 2010 09:02|
|Last Modified:||16. Feb 2013 20:42|
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