Economic Growth and the Quality of Teachers in a Public Education System

Mausumi Das and Subrata Guha

in Dimensions of Economic Theory and Policy

Published in print October 2011 | ISBN: 9780198073970
Published online September 2012 | e-ISBN: 9780199081615 | DOI:
Economic Growth and the Quality of Teachers in a Public Education System

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This chapter assesses the impact of the quality of teachers on the growth process in a small open economy with a universal public education system. The teachers' salaries are shouldered by the government and financed by taxation, while education is provided free to all. Specifically, a tax is imposed on the labour income of current adults and on income from capital generated within the economy. The quality of workers including those joining the teaching profession is endogenously determined by their level of human capital. In this setup, the chapter demonstrates that the rate of economic growth is a function of the quality of teachers relative to the quality of all workers in the economy. The latter, in turn, is correlated with the taxation policy of the government. The chapter also shows that there is an optimal tax policy and an optimal value for the relative quality of teachers.

Keywords: teachers; economic growth; public education; open economy; taxation; income; human capital; quality; workers; optimal tax policy

Chapter.  7184 words. 

Subjects: Microeconomics

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