Schools or Hospitals? Mortality, Allocation of Government Expenditure and Growth

Abstract:     
The allocation of resources between education and health is an important and puzzling decision for the governments in countries with high mortality rate. We build a three-period overlapping generation model with mortality risk and show that if public education expenditure exceeds a critical value, young cohort loses incentives to study and growth effects of public education expenditure becomes negative.

Number of Pages in PDF File: 11

Keywords: Public Education Expenditure, Public Health Expenditure, Mortality, Growth

JEL Classification: H3, H5, O41

working papers series