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| dc.title | Education Spending and Economic Growth: Short and Long-term Effects |
| dc.contributor.author | Contreras, Dante |
| dc.contributor.author | Galindo, Arturo |
| dc.contributor.author | Lepe, Ignacio |
| dc.contributor.orgunit | Country Department Southern Cone |
| dc.coverage | Latin America |
| dc.coverage | The Caribbean |
| dc.date.available | 2025-08-11T00:08:00 |
| dc.date.issue | 2025-08-08T00:08:00 |
| dc.description.abstract | This paper examines the short- and long-term effects of education expenditure on economic growth using a global panel of 107 countries from 1970 to 2019. Employing a CS-ARDL model with an error correction framework, we estimate dynamic responses to both aggregate and disaggregated real education spending across primary, secondary, and tertiary levels. The results show that public investment in education has a statistically significant and positive impact on real GDP per capita, both in the short and long run. The long-run elasticity is highest for aggregate expenditure and comparable across primary and secondary education, while it is lower for tertiary education. We further explore heterogeneity in long-run effects and find that higher educational achievement, proxied by PISA scores, amplifies the growth impact of education spending. Simulations confirm that countries with higher PISA scores experience faster and stronger returns on investment. These findings underscore the role of education quality in enhancing the productivity of public education spending and support targeted policy efforts to improve both the quantity and quality of educational investment. |
| dc.format.extent | 23 |
| dc.identifier.doi | http://dx.doi.org/10.18235/0013634 |
| dc.identifier.url | https://publications.iadb.org/publications/english/document/Education-Spending-and-Economic-Growth-Short-and-Long-term-Effects.pdf |
| dc.language.iso | en |
| dc.publisher | Inter-American Development Bank |
| dc.subject | Economic Development |
| dc.subject | Education Expenditure |
| dc.subject | Gross Domestic Product |
| dc.subject | PISA Test |
| dc.subject | Higher Education |
| dc.subject | Educational Level |
| dc.subject.jelcode | H52 - Government Expenditures and Education |
| dc.subject.jelcode | I25 - Education and Economic Development |
| dc.subject.jelcode | O10 - Economic Development: General |
| dc.subject.keywords | educational expenditure;economic growth;error correction model |
| dc.type | Technical Notes |
| idb.identifier.pubnumber | IDB-TN-03178 |
| idb.operation | RG-T4571 |