On the Emergence of Public Education in Land-rich Economies

GALIANI, SEBASTIÁN; HEYMANN, DANIEL; DABÚS, CARLOS; TOHMÉ, FERNANDO

JOURNAL OF DEVELOPMENT ECONOMICS

NORTH-HOLLAND

Lugar: Amsterdam; Año: 2008 vol. 86 p. 434 - 446

0304-3878

We analyze the emergence of large-scale education systems by modeling the incentives that the economic elite could have(collectively) to accept taxation destined to finance the education of credit-constrained workers. Contrary to previous work, in ourmodel this incentive does not arise from a complementarity between physical and human capital in manufacturing. Instead, weemphasize the demand for human-capital-intensive services by high-income groups. Our model seems capable to account forsalient features of the development of Latin America in the 19th century, where, in particular, land-rich countries such as Argentinaestablished an extensive public education system and developed a sophisticated service sector before starting significantmanufacturing activities.