Education public financing and economic growth: an endogenous growth model versus evidence

What is it about?

In this paper we show in theory and data that subsidies to education only contribute to economic growth conditional on unemployment. Additionally we also show that the relationship between subsidies to education and economic growth is negatively influenced by the level of unemployment.

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Why is it important?

This paper highlights that subsidies to education may not be useful if the economy has a growing unemployment. It suggests that economies should be concerned with unemployment before they spend public budget on education.