The name is absent



goods creation and social transfers may also have a preference for creating a high quality
public education system, equalizing incomes and earning prospects of the future generations.22
If, however, educational expenditures or education quality have a positive effect on student
achievement, their exclusion will positively bias the effect of government size in our previous
models since the variables are likely to be positively correlated.23

Table 8. Post-communist period and school quality measures

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)

Gov. consumption
expenditures, percent of GDP
(log)

-0.856

(0.569)

-

-

-0.924

(0.637)

-

-

-0.587

(0.550)

-

-

Gov. social expenditures,
percent of GDP (log)

Income tax rate progressivity

GDP per capita (log)

-

-

0.554

-1.360*
(0.537)

-

0.659

-

-0.093+

(0.054)
0.412

-
-
1.579*

-1.496**
(0.563)

-

0.152

-

-0.116*
(0.046)
2.005**

-

-

1.347*

-1.394**
(0.511)

-

1.216

-

-0.132**
(0.049)
0.901

Percentage secondary school
attained among adults (log)

Population size (log)

Primary education
expenditures

per pupil, percent of GDP (log)
Pupil-teacher ratio in primary
education

(0.577)

-0.498

(0.717)

2.836+

(1.008)
0.658

(1.077)
4.303

(0.676)

-1.039

(0.878)

1.579

(0.616)

-1.168+

(0.646)

1.178

(1.024)

-0.168

(0.868)

6.258

(0.697)

-1.426+
(0.768)
0.906

(0.542)
1.154*

(0.533)
1.647

(1.030)
0.571

(0.794)
2.266

(0.618)

-0.166

(0.725)
0.628

(1.557)
-

-

(4.117)
-

-

(1.771)
-

-

(1.516)
0.412

(0.295)

-

(4.087)
0.433

(0.341)

-

(1.466)
0.579*

(0.287)

-

(1.190)
-

-0.005
(0.032)

(3.189)
-

0.048
(0.031)

(1.363)
-

-0.003
(0.033)

Sample

All

OECD

All

All

OECD

All

All

OECD

All

Time period 1990 - 2003

yes

yes

yes

no

no

no

no

no

no

Country fixed effects

yes

yes

yes

yes

yes

yes

yes

yes

yes

Time fixed effects

yes

yes

yes

yes

yes

yes

yes

yes

yes

Observations

177

102

163

166

104

152

185

103

160

Countries

58

28

56

52

27

50

58

27

55

R2

0.9617

0.8791

0.9626

0.9558

0.8740

0.9609

0.9484

0.8833

0.9645

R2 (within)

0.2251

0.3290

0.1744

0.2377

0.3010

0.3161

0.2462

0.3398

0.2094

F-test (social spending, school
quality)

1.5582

3.749

4.3742

0.5928

5.2155

3.9535

(p-value)______________________

0.2156

0.029

0.0155

0.5545

0.0081

0.0226

Note. Absolute t-values in parentheses, + * and ** denote significance at 10, 5 and 1 percent level, respectively.

22 In principle, the quality of teaching may also be influenced by the government creating incentives for teachers.
That teachers may influence student effort is discussed in the model section.

23 The correlation coefficients of per pupil spending in primary education with our government consumption and
social spending exceed well 0.5, while those with pupil-teacher ratio in primary education are -0.76 and -0.29,
respectively.

24



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