Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/127464
Authors: 
Dragomirescu-Gaina, Catalin
Year of Publication: 
2015
Citation: 
[Journal:] IZA Journal of European Labor Studies [ISSN:] 2193-9012 [Publisher:] Springer [Place:] Heidelberg [Volume:] 4 [Year:] 2015 [Issue:] 25 [Pages:] 1-24
Abstract: 
This paper makes two important contributions. Firstly, it uncovers some of the main economic determinants driving the dynamics of public education spending in Europe. Drawing mainly on the insights provided by Baumol's cost theory, the baseline specification uses unit labour costs and real GDP per capita as its main determinants. Some important institutional rigidities are also highlighted. The results confirm the fast relative increase in education costs, exposing the long-term affordability challenge of public education investment. Secondly, by including a policy objective and translating the empirical specification into a decision rule, the paper touches on some less mentioned determinants, such as policy commitment. Unfortunately, there is only weak overall evidence that public education spending would increase in response to a lack of progress in the policy objective. Finally, policy implications are discussed.
Subjects: 
Education spending
Baumol cost disease
Policy commitment
JEL: 
D78
H41
H52
I22
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by/4.0/
Document Type: 
Article

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