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Publicly Financed Education in an Endogenous Growth Model - WP 02/24

Publication Details

  • Publicly Financed Education in an Endogenous Growth Model
  • Published: Dec 2002
  • Status: Current
  • Authors: Creedy, John; Gemmell, Norman
  • JEL Classification: D5; H2; H4; H52
  • Hard copy: Available in PDF format only.
 

Publicly Financed Education in an Endogenous Growth Model

New Zealand Treasury Working Paper 02/24

Published Dec 2002

Authors: John Creedy and Norman Gemmell

Abstract

This paper constructs an endogenous growth model, applicable largely to developing countries, based on human capital accumulation in which education is publicly provided and financed, and schooling is compulsory. Public investment in human and physical capital are financed from taxes on wage and capital income, and consumption. The equilibrium growth properties of the model are examined and the steady-state effects of education and fiscal policy are derived. The specification of the human capital production function and the strength of labour supply effects are shown to be important for the magnitude of steady-state outcomes. Simulations illustrate the model's properties.

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