The impact of public expenditure and quality by educational stage on Brazilian states’ per capita income growth

Abstract

In this paper, we try to better understand the relation between the optimal allocation of educational investments by the Brazilian states and their economic growth, inspired by Aghion et al.’s (2005) model. The results show that, although educational expenditures have no significant impact, the quality of high school education has a positive impact on per capita income growth for closer to frontier states. Our estimates indicate that the quality of high school education becomes more important than primary education’s for states with per capita income equal to or bigger than 60% of the frontier.