Macroeconomic effects of 'free' secondary schooling in the developing World

Author / Creator

Fujimoto, Junichi

Available as

Online

Summary

This paper studies the macroeconomic effects of publicly funded ('free') secondary schooling in the developing world. Our analysis is based on an over-lapping generations model of human capital acc...

This paper studies the macroeconomic effects of publicly funded ('free') secondary schooling in the developing world. Our analysis is based on an over-lapping generations model of human capital accumulation that we estimate to match experimental evidence on the effects of scholarships for poor but talented students in Ghana. The model predicts that nationwide free secondary schooling increases average education levels but reduces GDP per capita in the long run. The human capital gains from free schooling in the model are offset by lost income during schooling years, negative selection of new students, and reductions in fertility by high-ability households.

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