Public expenditures on education, human capital and growth in Canada: An OLG model analysis

Much of the current debate in ageing countries focuses on whether governments should increase investments in human capital. We address this issue by simulating the effects of additional education spending using an overlapping-generations model applied to Canada. In the context of population ageing,...

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Bibliographic Details
Published in:Journal of policy modeling 2011-11, Vol.33 (6), p.852-865
Main Authors: Annabi, Nabil, Harvey, Simon, Lan, Yu
Format: Article
Language:English
Subjects:
Canada
Economic growth
Economic models
Economic policy
Education finance
Education policy
Educational expenditure
Expenditures
General equilibrium model
Government spending
Human capital
Labor economics
Labour force
Overlapping generations
Overlapping-generations model
Population ageing
Public expenditure
Public expenditure Human capital General equilibrium model Overlapping generations Canada
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Summary:Much of the current debate in ageing countries focuses on whether governments should increase investments in human capital. We address this issue by simulating the effects of additional education spending using an overlapping-generations model applied to Canada. In the context of population ageing, the results indicate that how the policy is funded has powerful impacts on the targeted outcomes. Higher education incentives may increase the rate of human capital accumulation and mitigate the negative effects of slowing labour force growth. However, the impact depends on the distortions implied by alternative tax instruments and the efficiency of public expenditures on education.
ISSN:0161-8938
1873-8060
DOI:10.1016/j.jpolmod.2011.08.020