Does the impact of private education on growth differ at different levels of credit market development?
Does the impact of private education on growth differ at different levels of credit market development?
Using an overlapping generations model, we show that the impact of private financing of education on growth depends on credit market development, being positive when credit markets are adequately developed but negative if sufficiently low levels of credit market development occur alongside relatively high private financing intensities. Employing cross-country data, we find that reduced-form growth relationships are statistically significant and robust under various controls and samples. We also lay out conditions under which economies with missing credit markets are dynamically efficient and outperform, in terms of growth, economies with complete credit markets. The latter may explain large cross-country differences in savings and growth, while facilitating the evaluation of policies on financing education.
credit market development, economic growth, private education
291-322
Hatcher, Michael
e0846252-6d46-44f8-ba3c-05cf1fba64ab
Pourpourides, Panayiotis
416cba1d-360e-4b8c-ba4d-10b6cb877f31
Hatcher, Michael
e0846252-6d46-44f8-ba3c-05cf1fba64ab
Pourpourides, Panayiotis
416cba1d-360e-4b8c-ba4d-10b6cb877f31
Hatcher, Michael and Pourpourides, Panayiotis
(2022)
Does the impact of private education on growth differ at different levels of credit market development?
Review of Development Economics, 27 (1), .
(doi:10.1111/rode.12952).
Abstract
Using an overlapping generations model, we show that the impact of private financing of education on growth depends on credit market development, being positive when credit markets are adequately developed but negative if sufficiently low levels of credit market development occur alongside relatively high private financing intensities. Employing cross-country data, we find that reduced-form growth relationships are statistically significant and robust under various controls and samples. We also lay out conditions under which economies with missing credit markets are dynamically efficient and outperform, in terms of growth, economies with complete credit markets. The latter may explain large cross-country differences in savings and growth, while facilitating the evaluation of policies on financing education.
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Review Development Economics - 2022 - Hatcher - Does the impact of private education on growth differ at different levels
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Accepted/In Press date: 21 September 2022
e-pub ahead of print date: 27 October 2022
Keywords:
credit market development, economic growth, private education
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Local EPrints ID: 472838
URI: http://eprints.soton.ac.uk/id/eprint/472838
ISSN: 1363-6669
PURE UUID: 4c430e70-4cd9-4e3e-9faa-a79b5990fa29
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Date deposited: 20 Dec 2022 17:33
Last modified: 17 Mar 2024 03:35
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Author:
Panayiotis Pourpourides
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