Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/142583
Authors: 
Armellini, Mauricio
Basu, Parantap
Year of Publication: 
2010
Series/Report no.: 
EERI Research Paper Series 21/2010
Abstract: 
An optimal education subsidy formula is derived using an overlapping generations model with parental altruism. The model predicts that public education subsidy is greater in economies with lesser parental altruism because a benevolent government has to compensate for the shortfall in private education spending of less altruistic parents with a finite life. On the other hand, growth is higher in economies with greater parental altruism. Cross-country regressions using the World Values Survey for altruism lend support to our model predictions. The model provides insights about the reasons for higher education subsidy in richer countries.
Subjects: 
Altrusim
Education Subsidy
Human Capital
Growth
JEL: 
D9
Document Type: 
Working Paper

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