Abstract

This article analyzes the effect of free public education on fertility, private educational investments, and human capital accumulation at different stages of economic development. The model shows that, when fertility is endogenous, parental human capital levels are crucial for determining the effect of free education. At early stages of development when parental human capital is low, free access to basic education may provide the only chance to leave poverty. In contrast, at advanced stages of development when parental human capital is high, the availability of free education crowds out private educational investments, stimulates fertility, and may impede growth.

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