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- Title
PUBLIC INVESTMENT IN A HIERARCHICAL EDUCATIONAL SYSTEM WITH CAPITAL–SKILL COMPLEMENTARITY.
- Authors
Sarid, Assaf
- Abstract
In this study I bring together two different literatures: the hierarchical education literature and the skill-biased growth literature. In an overlapping-generations model I introduce capital–skill complementarity into a hierarchical education system. I obtain results that differ qualitatively from previous studies, among which are the following: (i) At earlier stages of development, basically educated labor contributes to growth more than highly educated labor. The opposite occurs at later stages. (ii) Even when all individuals acquire higher education, a growth-enhancing policy subsidizes higher education. (iii) In a growth-enhancing policy, the share of public resources allocated to basic education declines as the economy grows. (iv) The enrollment rate evolves in an S-shaped pattern, as occurred in several OECD countries.
- Subjects
OECD countries; PUBLIC investments; CAPITAL; HIGHER education; ECONOMIC development
- Publication
Macroeconomic Dynamics, 2017, Vol 21, Issue 3, p757
- ISSN
1365-1005
- Publication type
Article
- DOI
10.1017/S136510051500067X