Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/330312 
Year of Publication: 
2025
Series/Report no.: 
ZEW Discussion Papers No. 25-049
Publisher: 
ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung, Mannheim
Abstract: 
This paper constructs a new global historical database on public expenditure and revenue and their components-particularly education and health expenditure-covering all world regions over the 1800-2025 period. We document a large rise of human capital expenditure (as % of GDP) in all parts of the world in the long run, but with enormous and persistent inequality between regions. Public education expenditure per school-age individual in Sub-Saharan Africa is about 3% of the level observed in Europe and North America in 2025 in PPP terms (versus 6% in 1980 and 4% in 1950). We also find a large impact of human capital expenditure on productivity growth over the 1800-2025 period, especially for public education and for poor countries. Estimated returns using our macro-historical database are around 10% or more, in line with micro studies. Finally, we present simulations based on alternative human capital expenditure trajectories over the 2025-2100 period. In particular, we analyze the conditions under which convergence in human capital expenditure could lead to global productivity convergence by 2100 (around 100€ per hour in all regions in our benchmark scenario).
Subjects: 
Human Capital
Productivity
Education
Health
Global Inequality
JEL: 
E24
H5
I15
I25
N10
Document Type: 
Working Paper

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