Does a Generous Welfare State Crowd Out Student Achievement? Panel Data Evidence from International Student Tests

36 Pages Posted: 3 Oct 2008

See all articles by Torberg Falch

Torberg Falch

Norwegian University of Science and Technology (NTNU) - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Justina A. V. Fischer

Organization for Economic Co-Operation and Development (OECD); Stockholm School of Economics; University of Hohenheim

Date Written: September 2008

Abstract

Student achievement has been identified as important contributor to economic growth. This paper investigates the relationship between redistributive government activities and investment in human capital measured by student performance in international comparative tests in Mathematics and Science during the period 1980 to 2003. In fixed effects panel models, government consumption, government social expenditures, and the progressivity of the income tax system have negative effects on student achievement. We report results from a variety of model specifications and social expenditure components, and our best estimate indicates that increased government size by 10 percent reduces student achievement by 0.1 standard deviations.

Keywords: student achievement, welfare state, government size, tax system, panel data, international tests

JEL Classification: H2, I2, C33

Suggested Citation

Falch, Torberg and Fischer, Justina A.V., Does a Generous Welfare State Crowd Out Student Achievement? Panel Data Evidence from International Student Tests (September 2008). CESifo Working Paper Series No. 2383. Available at SSRN: https://ssrn.com/abstract=1264915

Torberg Falch (Contact Author)

Norwegian University of Science and Technology (NTNU) - Department of Economics ( email )

N-7491 Trondheim
Norway

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

Justina A.V. Fischer

Organization for Economic Co-Operation and Development (OECD) ( email )

2 rue Andre Pascal
Paris Cedex 16, 75775
France

Stockholm School of Economics

PO Box 6501
Stockholm, 11383
Sweden

University of Hohenheim

Fruwirthstr. 48
Stuttgart, 70599
Germany

Register to save articles to
your library

Register

Paper statistics

Downloads
64
Abstract Views
486
rank
345,237
PlumX Metrics