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The impact on growth of higher efficiency of public spending on schools

Gonand, Frédéric (2007-02), The impact on growth of higher efficiency of public spending on schools. https://basepub.dauphine.fr/handle/123456789/11044

Type
Document de travail / Working paper
Date
2007-02
Publisher
OCDE
Series title
OECD Papers
Series number
547
Published in
Paris
Pages
35
Metadata
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Author(s)
Gonand, Frédéric
Abstract (EN)
This paper assesses the impact on economic growth of increased efficiency of public spending in primary and lower-secondary education. Higher efficiency in publ ic spending in schools can bolster growth through two main channels. On the one hand, it can allow a transfer of labour from the public sector to the business sector at unchanged educational output. On the other, it can enhance educational output and productivity of the future labour force at unchanged public employment and expenditures. The paper argues that, in most cases, efficiency gains might have larger effects on GDP in the long run if they are used to increase educational outputs rather than to reduce inputs. A 10% increase on educational output might raise GDP by, on average, 3% to 6% in the long run in most OECD countries, whereas using efficiency gains to transfer resources to the business sector might have an impact of less than 1% on GDP. However, some trade-off can appear in the short run because input-decreasing efficiency gains materialise more rapidly on growth than improvements in output-increasing efficiency.
Subjects / Keywords
Public spending efficiency; Public education; Structural reform; Long-run economic growth; Human capital
JEL
H11 - Structure, Scope, and Performance of Government
I20 - General
I28 - Government Policy

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