Skill Formation, Public Expenditure on Education and Wage Inequality: Theory and Evidence

Biswas, Anindya; Chaudhuri, Sarbajit

doi:10.1007/s40953-017-0083-6

Cited by 2 publications

(3 citation statements)

References 12 publications

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“…Skill formation is usually promoted as a solution to this but the problem of capital remains. Biswas and Chaudhuri (2018) examined the relationship between wage inequality and public expenditure on education. Public funded education would offer an incentive for the population to get educated but that does not guarantee jobs or productivity.…”

Section: Empirical Literaturementioning

confidence: 99%

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Education, Lack of Complementary Investment and Underemployment in an Open Economy

Marjit

Ahuja²,

Pandey³

2021

SSRN Journal

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In many developing economies rate of unemployment is increasing with skill accumulation and thereby leading to underemployment. Our paper offers to look at skill formation as a demand side problem not as a traditional supply side problem and also how skill formation or education affects unemployment among the remaining uneducated. We have developed a general equilibrium model of a small open developing economy incorporating skill formation, unemployment of unskilled labour in the formal sector and an informal sector which absorbs unemployed workers at a flexible wage rate. In this set up greater education for a group may generate educated unemployment within the group and increase unemployment of the uneducated outside the group leading to underemployment through the expansion of the informal sector. Both effects are due to shortage of complementary investment in production activities. Our theoretical findings are motivated by existing empirical evidence and a fresh empirical exercise undertaken using panel data of 32 countries.

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Section: Empirical Literaturementioning

confidence: 99%

“…Biswas and Chaudhuri (2018) andGupta and Dutta (2010) both talk about education and wage inequality but the demand for skill issue the way we highlight here is not highlighted in these papers. Also seeMehta and Hasan (2012) andMukhopadhyay (2021).…”

mentioning

confidence: 99%

Education, Lack of Complementary Investment and Underemployment in an Open Economy

Marjit

Ahuja²,

Pandey³

2021

SSRN Journal

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“…Moreover, the given theory also states that the details of taxation are majorly guided by two principles; who will benefit and who can pay. According to Biswas and Chaudhuri (2018) PE means spending on the development and non-development practice such as the development of roadways and dams and other practices that directly influence the entire economic development. Furthermore, this theory also states that the correct use of PE can be a useful and significant economic policy strategy for governments to improve the current economic situation of the country (Das & Kar, 2016).…”

Section: Theory Of Public Expenditurementioning

confidence: 99%

Government Size, the Composition of Public Spending and Economic Growth in Netherland

Nartea

Hernandez

2020

Journal of Accounting, Business and Finance Research

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The performance of the fiscal policy is influenced significantly by the relationships and associations among the governmental size, the composition public and private spending and the economic growth of a country. The primary goal of this research study is to evaluate the impact of these factors and to evaluate the significance of these factors in the economic growth of the Netherlands. The economy of Netherlands is characterized as the 17th largest in the world and it presents stable and sustainable growth. In this altercation the researcher aimed to evaluate the significance of the governmental spending and size. For this purpose, the researcher used the data from 2004-2014 from the 12 provinces of Netherlands. The data was subjected to a unit root analysis so that the stationarity properties of the panel data can be evaluated. The unit root test results showed that the variables were stationary at I(0). In order to abstain from the endogeneity issues that can be present in such types of datasets the researcher used level and per capita variables as a robustness evaluation. The empirical framework was based upon the Cobb-Douglas production function and used the modern CES substitution elasticities to compute as the inputs of private capital and government spending in the production function. The nonlinear leastsquares regression estimation method was used to evaluate the impact of the variables upon one another. The results indicate that the public investments and current governmental disbursements are conjoined in order to account for the inflexibility of the communal budget. Moreover, the governmental spending was found to be greater than 85 percent indicating that the provincial sectors are focused upon the stimulation of the economy.

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Skill Formation, Public Expenditure on Education and Wage Inequality: Theory and Evidence

Cited by 2 publications

References 12 publications

Education, Lack of Complementary Investment and Underemployment in an Open Economy

Education, Lack of Complementary Investment and Underemployment in an Open Economy

Government Size, the Composition of Public Spending and Economic Growth in Netherland

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