Public Education Expenditures Research Articles

Assessment of public expenditure on education and the impact of revenues: the case of Moldova

Investment in human capital is a key strategic concept for the economy and for future development of a country. Therefore, public expenditure on education determines a major point in countries like Moldova, where the education is financed from public funds predominantly. Theories show that the link between expenditures and revenues is inevitable in most of the cases. This study attempts to approach two angles of spending in education: the first is to study and analyse public expenditures in education and in what budget proportions they are spent, and the second is to find out whether there exists a relationship between expenditures in education and government revenues; if yes, to what extent the revenues would have an impact on the expenditures in education. The Autoregressive Distributed Lag model was used in order to find the impact of revenues on expenditures in education. The model was tested for stability, heteroskedasticity, correlation, and normality. The results of the study show that the expenditures on education in the Republic of Moldova lack stability in relation to the economy and that the significant impact from government revenues determines the expenditures in the short and long run. The research is a contribution to the enhancement of public expenditure policy in education taking into consideration the limits imposed from the revenues side, and it may guide governments for better decision-making policies.

Immigration vs. Poverty: Causal Impact on Demand for Redistribution in a Survey Experiment

Demand for and provision of redistributive public intervention, which had in the recent past given way to immigration in the political arena, bounced force-fully back at the onset of the economic consequences of the Covid pandemic. We investigate how demand for both the financing and the provision of redistribution is affected by immigration and poverty. Information about immigration has a negative impact on demanded redistributive taxation among high income respondents and a positive one among low income earners. Information about poverty has no impact. On the provision side, high income respondents increase desired public education expenditure in response to poverty, while low income respondents reduce desired education spending in response to immigration. These heterogeneities are consistent with protectionist reactions to immigration and poverty.

REVISITING LONG-RUN DYNAMICS OF THE DETERMINANTS OF PUBLIC EDUCATION EXPENDITURE IN MALAYSIA

ABSTRACT
 This main purpose of this paper is to revisit the long run dynamics on Malaysia’s public education expenditure determinants during the period of 1982 to 2016. This study will also attempt to discuss some of the relevant theories that are able to explain and characterized the pattern of Malaysia’s public education expenditure. A relatively recent developed estimation technique, ARDL bound testing was employed to estimate the long run relationship between public education expenditure and its determinants. The results based on the ARDL bound testing approach concluded that a stable, long-run co-integrated relationship exists between public education expenditure and its determinants: real gross domestic product (GDP), unemployment rate (UNEM), inflation rate (INF) and working age population (POP2). Furthermore, the result highlighted the relevance and suitability of Keynesian Counter Cyclical theory, Economic-Demography theory and Peacock-Wiseman in explaining the pattern of Malaysia’s public education expenditure. In addition, bilateral causality was found between public education expenditure and real GDP. Similarly, a two-way causal relationship was also found between tax revenue and public education spending. Finally, this study suggests that policymakers should pay more attention to the economic situations and the demands from society when formulating future policies or allocations.

Sino-African Relations and ODA in the Twenty-First Century: Chinese Aid and Public Expenditure in Education and Health Sectors of Sub-Saharan African Nations

This paper explores the indirect relationship between Chinese aid and public expenditure in human development sectors in African nations. This is achieved through analyzing the change of public expenditure in the education and health sectors of the top two African recipients of Chinese ODA—Ethiopia and Cote d’Ivoire, with an extended analysis to an additional five African nations. Through a comparative analysis, this paper investigates if a direct connection between public expenditure in the health and education and Chinese aid can be established, and explores its implications in the larger international aid system. The study discovers an overall pattern of increased public health and education expenditure in African nations after the influx of Chinese ODA; however, a connection between the two cannot be established. The study discovered that public health and education expenditure increased by larger percentages in nations with previously established ambitions and goals of poverty reduction and human development, indicating that the surge of Chinese aid may have contributed to increased fiscal autonomy in the African aid recipients, providing more freedom to increase expenditure in already prioritized sectors. The result of this analysis, hence, contravenes the narrative of Chinese aid hindering African human development.

State - Wise Public Expenditure on Higher Education in India : An Empirical Analysis

Public expenditure is a major component of education expenditure in India. Though the higher-education expenditure in India increased significantly after Independence, budgetary allocations to higher education were squeezed off in the post economic reforms period and this sector also suffered significantly. The proportionate spending on the higher-education sector in India is much below the Central Advisory Board of Education (CABE) committee recommendation of 1% of gross domestic product for general higher education. The present study aimed to analyze state-wise disparity in public higher education expenditure in India by different parameters like per capita and per student higher education expenditure in terms of plan and non expenditure as well as revenue and capital expenditure. The regression results revealed that many states had elasticity of higher-education expenditure to gross state domestic product (GSDP) less than unity. Central and state governments of India should implement policies for more funding in the higher-education sector.

Public education, intergenerational transfers, and fertility

We consider a three overlapping generations model with physical and human capital. In the absence of credit markets to finance education investments, the government provides public education for the young that can be financed through lump-sum taxes on the middle-aged and/or the elderly. Embracing the Golden Rule criterion, we analyse the welfare effects of public provision of education, intergenerational transfers and changes in the demographic growth rate. We identify sufficient conditions for welfare improvements following marginal increases in public education expenditures, lump-sum taxes on the middle aged, and the population growth rate along a locally stable balanced growth path.

Bonus pay for teachers, spatial sorting, and student achievement

Bonus pay policy for teachers in the U.S. is analyzed in this paper. We quantitatively argue that, because of the decentralized education finance system in the U.S., this policy may lead to higher teacher and household sorting across school districts. This then may lead to higher variance of achievement and lower mean achievement. Formally, we use an equilibrium political economy model of education at which households, heterogeneous in exogenously set income, and teachers, heterogeneous in exogenously set quality, are endogenously allocated across two school districts. Public education expenditures, which includes teachers’ wage payment and non-teacher related education spending, are financed through local income taxation. Income tax rate in each district is determined via majority voting. Achievement depends on the efforts chosen by teachers and non-teacher related education spending. Teacher efficiency wage per unit of quality is determined at the national teacher labor market. We first calibrate our benchmark model by matching certain statistics from the U.S. data. Then in a computational experiment, we introduce bonus pay for teachers which rises with average achievement. We find that for the recently observed level of average bonus pay (6.59% of average base salary), variance of achievement is 2.46% higher and mean achievement is 1.79% lower than the benchmark. Variance of achievement reaches its peak when average bonus pay is 14.06% and then it starts falling. Also, mean achievement always falls as average bonus pay rises.

Spatial Economic Convergence and Public Expenditure in Ecuador

In Ecuador, the sectorial policies, public policies and state investment, increase the presence of polarized and polycentric territories with very heterogeneous characteristics and with asymmetric levels of economic growth and development. The explanation for the unequal growth of regions in Ecuador is determined by the existence of different types of asymmetries; that determine economic dynamics and non-convergent development processes. The aim of this research is to determine the effect of an increase in public spending on physical infrastructure and education, on the improvement of productive conditions and on the process of reducing disparities (convergence) at the regional level in Ecuador. To do this, the hypothesis of beta convergence will be tested, which is conditioned by the proxy variables of public expenditure or investment in infrastructure and education at provincial level, for the 2001–2015 period. The results show the existence of a "slight" process of convergence per capita and productivity, although with a significant level of territorial "segregation". In the same way, it is observed that public investment made in this period did not increase the productivity of small and medium-sized provinces significantly, severely conditioning the sustainability of the process of reducing disparities at regional level.

Public Education Expenditure and Its Impact on Human Resource Development in India: An Empirical Analysis

Societal and global advancement increasingly depends upon research, invention, innovation and adaptation; all of these are products of educated mind. Education is public good in LDCs and need Government involvement to function effectively. National Education Policies of India in 1968, 1986 and 1992 (revised) have recommended 6% of GDP to spend on education which unfortunately was on an average 3.77% in last one and half decade. This insufficient funding can be considered as one of the factors for India’s low ranking in terms of Human Development Index. Descriptive and analytical methods are used to study the relationship between Public Education expenditure and Human Resource Development of India by using the secondary data collected through the reliable sources like Ministry of human resource development and Human Development reports published by UNDP. To analyse the relationship between spending by the Government on education and improvement in quality of Human resource, Granger Causality Test is applied. The results of the study show the influence of Public education expenditure on Human Resource Development in India.

What future(s) for distance education universities? Towards an open network-based approach

La necesidad de aumentar la escalabilidad, la interoperabilidad, y la flexibilidad de la oferta educativa está impulsando la expansión del aprendizaje digital y abierto en la educación superior. A medida que este movimiento se expande por todo el mundo, las universidades de educación a distancia entran en una crisis. El aprendizaje potenciado por la tecnología está ahora diseminado por todas las instituciones y la mayoría también ha adoptado prácticas educativas abiertas cómo consecuencia del gran impacto de los MOOC. En este nuevo contexto de rápido crecimiento, caótico e inestable, detener expertise basada en la investigación, una infraestructura dedicada y personal especialmente capacitado podrá ya no ser considerado cómo necesario para que las instituciones puedan ofertar educación a distancia o en línea. Además, van surgiendo nuevos proveedores no institucionales de educación superior no formal, ofertando cursos y programas de aprendizaje abierto en línea o semi-presencial. Lejos de los días en que las universidades de educación a distancia quedaban solas en el sistema educativo con la misión única de proporcionar un tipo innovador de educación para todos, ellas ahora compiten abiertamente con las demás. En un momento de contención del gasto público en educación, surgió en los últimos años un debate sobre la sostenibilidad de estas instituciones, especialmente en Europa. En este trabajo analizamos los nuevos retos y oportunidades sociales, económicas y tecnológicas a los que se enfrentan las universidades de educación a distancia, y discutimos la reinterpretación de su misión. También exploramos los modelos organizacionales existentes y proponemos uno nuevo basado en un enfoque de red abierta.

How does natural resource dependence affect public education spending?

The "resource curse" phenomenon has been the subject of extensive research, with its causes and transmission mechanisms primarily examined from the perspectives of economic development and rent seeking. Education is a major factor contributing to economically sustainable development, owing to its potential for improving cognition and skill levels and thereby enhancing worker productivity. The crowding-out or crowding-in effect of natural resource dependence on public education spending has been identified as one of the key mechanisms of the resource curse or blessing. Using panel data from 31 Chinese provinces, this empirical study revealed a positive correlation between natural resource dependence and public education expenditure, demonstrating the impact of the crowding-in effect, exerted by natural resource dependence, on public education expenditure. Abundant natural resources can provide funds for education expenditure. The sample was further divided into eastern and central and western regions. The results indicate that the crowding-out effect of natural resource dependence only affects public education expenditure in the Eastern region, while the crowding-in effect of natural resource dependence on public education expenditure in the central and western regions. Research shows that the regional differences of crowding-out or crowding-in effect are very obvious, so the government should adopt transfer payment to promote balanced regional development. Better economic and social policies will help to translate wealth from natural resources into economic growth. Thus, a "resource blessing" may emerge to replace the "resource curse." Fairly distributed and higher quality education will enhance human capital, thereby promoting economic growth from its current resource-driven pattern to a knowledge-driven pattern.

STRUCTURAL CHANGE THROUGH PUBLIC EDUCATION EXPENDITURE: EVIDENCE FROM CHINA

Under China's hukou system, I analyze the relationship between public education expenditure and structural change as measured by labor transfer from the agricultural to the industrial sector. I construct a two‐sector general equilibrium model, which shows that in the short term, public education expenditure crowds out industrial capital accumulation and temporarily hinders structural change, but in the long term, public education expenditure permanently reduces rural residents' education costs. An inverted U‐shape relationship implied by the empirical evidence indicates that China's current public education expenditure is far from optimal, suggesting that China should increase it, especially for rural residents. (JEL I28, O11, O15)

Accounting for Growth Effects of Age Structure Transition through Public Education Expenditure: New Macroeconomic Evidence from India

This article quantifies the growth effects of age structure transition through current public education expenditure. Using the National Transfer Accounts’ (NTA) First Demographic Dividend (FDD) model, growth effects are accounted by the impact of current public education expenditure on economic support ratio (ESR) and labour productivity through human capital investments. The results offer new macroeconomic evidence. Age structure transition reduces the education dependency ratio (EDR) by all levels of education but the highest in the elementary education. This impacts on a long-term decline in enrolment in elementary education where the current gross enrolment ratio (GER) is close to 100 per cent and a decline in current public education expenditure. Other things being equal, the resultant potential savings, or the availability of extra budgetary resources, is a new way of financing the investment requirements for secondary and higher education with the aim of increasing national economic growth through human capital investments. In particular, growth effects are shown to be positive, higher and longer up to 2050, if the current public education spending is reallocated more for the secondary and higher education. Surprisingly, growth effects are explained less by the ESR than labour productivity. This justifies a higher human capital investment to enhance labour productivity for attainment of higher economic growth. The afore- mentioned macroeconomic framework, results and implications are of general relevance for other developing countries in South Asia and elsewhere in the world. JEL Classification: E65, H52, J11

Intergovernmental Fiscal Transfers and County-Level Education Expenditure in China

Purpose The purpose of the paper is to investigate the impact of various types of intergovernmental fiscal transfers on local public education expenditure at the county level in China and to estimate the leakage of categorical subsidies for rural compulsory education. Design/Approach/Methods It is a quantitative study. The paper constructs a quantile regression model and adopt data collected in 2007 for 1,985 counties in China to examine the impact of relevant fiscal transfers. Findings The results reveal that most intergovernmental fiscal transfers exert a substitution effect on the local education expenditure, whereas subsidies for rural compulsory education from the Central Government have a crowding-out effect on education investments from local financial resources. Although the subsidy program generally narrows the education expenditure disparity across counties, there are heterogeneous effects across different regions. Originality/Value The paper estimates and compares the impact of fiscal transfers on both the level and disparity of local public education in different regions, and provides a possible explanation for the crowding-out effect of fiscal transfers in China.

Sustainability of public debt under physical and human capital accumulation in an overlapping generations model

I consider the sustainability of public debt by using an overlapping generations model with human capital accumulation (private and public education) and public debt. By admitting that the government can finance public educational expenditure by issuing new public debt, based on this model, I explicitly show (i) the parameter region in which public debt is not sustainable for any initial endowment and (ii) the threshold of initial endowment over (under) which the economy diverges from (converges to) the steady state. I also show that the threshold is neutral to the level of human capital. Further, I analytically show the existence and uniqueness of the long-run growth-maximizing level of each policy variable (i.e., the tax rate and public education/production ratio) when public debt is sustainable.

The Relationship between Public Expenditure for Technical and Vocational Education and Employability Skills of the Graduates of Vocational Colleges in Malaysia

Public expenditure for technical and vocational education is important for Malaysia to produce high skilled workers to achieve the status of a developed and high-income country by the year 2020. The objective of this study is to measure the relationship between public expenditure for technical and vocational education and employability skills of the graduates of vocational colleges in Malaysia. The SmartPLS path model analysis revealed two important findings: first, recurrent expenditure was significantly correlated with employability skills. Second, development expenditure was significantly correlated with employability skills. These outcomes demonstrate that the ability of technical and vocational education administrator to provide and manage adequate financial allocation may lead to enhance graduate’s employability skills. In addition, discussion, implications and conclusion are described.

Enhancing the Cross-Cultural Comparability of Self-Reports Using the Overclaiming Technique: An Analysis of Accuracy and Exaggeration in 64 Cultures

The overclaiming technique (OCT) is a novel way of measuring how socially desirable responding influences survey responses. It has the potential to enhance the cross-cultural comparability of survey data. It allows the identification of respondents’ knowledge accuracy and exaggeration by comparing their assessments of familiarity with existing and nonexisting concepts in a particular field of knowledge. We aim to compare the response patterns of countries and world regions based on their OCT accuracy and exaggeration-index values and validate these OCT scores using external variables. We also introduce a general model for the categorization of respondents based on their OCT indices values. We use the Programme for International Student Assessment (PISA) 2012 data from 64 countries ( N = 275,904). We found considerable differences in response patterns across world regions: high accuracy values in East Asia, low accuracy values in Southern and Central America, high exaggeration values in Southern Europe, and low exaggeration values in Western Europe. Furthermore, we show that familiarity with math concepts changes substantially after adjustment using the OCT. The correlation between unadjusted math familiarity and math test scores is weak and nonsignificant (.13) whereas after adjustment the correlation becomes strong and significant (.66). Concerning other indicators such as gross domestic product (GDP), public expenditure in education, and Corruption Perceptions Index (CPI), before adjustment the correlation is negative and even significant for CPI (–.11, –.22, and –.45) whereas after adjustment the correlation becomes, though nonsignificant, positive (.05, .19, and .07). We also discuss the OCT in the context of other methods indicative of culturally preferred scale usage.

Educational inequality and intergenerational mobility in Latin America: A new database

The causes and consequences of the intergenerational persistence of inequality are a topic of great interest among various fields in economics. However, until now, issues of data availability have restricted a broader and cross-national perspective on the topic. Based on rich sets of harmonized household survey data, we contribute to filling this gap by computing time series for several indexes of relative and absolute intergenerational education mobility for 18 Latin American countries over 50 years and making them publicly available. We find that intergenerational mobility is, on average, rising in Latin America. This pattern seems to be driven by the high upward mobility of children from low-educated families; at the same time, there is substantial immobility at the top of the distribution. Significant cross-country differences are observed and are associated with income inequality, poverty, economic growth, public educational expenditures, and assortative mating.

Does public expenditure on education promote Tunisian and Moroccan GDP per capita? ARDL approach

This paper aims to analyze the impact of public education expenditures on GDP per capita of Tunisia and Morocco during the period 1980–2015. This study is based on the Auto-Regressive Distributive Lags (ARDL) approach that is proposed by Pesaran et al. The empirical estimate yields interesting results. In the short term, the relationship between public spending on education and GDP per capita in Morocco is positive while it is negative in Tunisia. In the long term, by contrast, public expenditure on education serves to increase the GDP per capita of the two countries, but more intensively so in Morocco than in Tunisia.

Study on the Impact of Local Public Expenditure on Housing Price—An Empirical Analysis Based on Provincial Panel Data

Based on the discussion about transmission mechanism of local public expenditure on housing price under different housing market types, the paper performs an empirical study on the influence of various public expenditures on housing price by using Chinese panel data of provinces from 2007 to 2015. According to the result, public education expenditure and public transportation expenditure have prominent capitalization effect on housing price. Among the expansions of various local public expenditures, public education expenditure is the most effective type to promote the capitalization of commercial housing. In dynamic panel test, the capitalization effect of public expenditure maintains significant after the introduction of consumer expectation, which is consistent with the regression result of static panel. At last, the paper puts forward some relevant policy suggestions for the government to optimize the structure of public expenditure, guide consumer expectations reasonably and promote the sound development of real estate market.