Investment in the levels of education and the effects on growth and income distribution

This dissertation addresses some of the most fundamental issues in development and growth economics in attempting to advance our understanding of the different ways education affects the growth of the world's economies toward augmented standards of living and in improving the distribution of income between the wealthy and the poor in society. This research focuses on the individual effects of primary, secondary and higher education, using different measures of education, on growth and income distribution. Three measures of the flow of education are examined: enrollment (which includes private and public), public expenditures and public expenditures per student in each level.; The panel data approach is utilized in estimating the effects of levels and measures of education on growth and income distribution across countries and over time. The study encompasses up to 110 countries and observations of education from 1960 to 1995. The samples are further split into separate regressions for developed and less developed countries (LDCs), as well as world regions.; It is found that all three levels of enrollment are beneficial to growth rates per capita at some points of development. Tertiary enrollment is significant in explaining differences in growth between developed countries and LDCs. Secondary education demonstrates significance for enrollment, public expenditures and expenditures per student to most of the sample splits. Primary education display most importance to growth through expenditures per student. Public expenditures and expenditures per university student are adversely related to growth in most regressions.; The results of regressing educational levels on income distribution reveal that secondary education has significant equalizing effects for all three measures of enrollment, public expenditures and expenditures per student. Expenditures per student in primary education also have equalizing effects. Public expenditures toward higher education, expenditures per student and enrollment therein tend to increase inequality.; This study concludes that, in order to increase growth rates, it is recommended for educational policy to promote universal enrollment, from the lower levels-up and allocate public expenditures mainly toward lower levels of education, while ensuring that expenditures per student is kept up with increases in student cohorts. These policies would also improve income distribution.