Browsing by Author "Mancera Hernandez, Fabian Alejandro"

This thesis studies the implications of quality of education in the steady state of an endogenous growth model for optimal spending allocation decisions with educated labor, mandatory schooling, congestion costs and infrastructure spillovers. Education quality is characterized by the past knowledge taught to the students, and the degree of congestion in schools. Congestion costs are defined as the ratio of teachers to students in the population, and as the proportion of government spending on education to the teaching capacity given the public infrastructure. The transitional dynamics associated with an increase in the degree of congestion, and the spending share on education, are analyzed in the balanced-growth path. It is shown that a revenue-neutral spending reallocation has an ambiguous effect in the final consumption and human capital accumulation levels. A growth-maximizing share of government spending on education is required to avoid ambiguous results. This is shown to depend either on the production function parameters only or on a combination of these with education parameters and a negatively related congestion parameter, accordingly to the congestion cost considered. Implications for increasing the years of mandatory schooling are also discussed.