Are there demonstration effects of fiscal expenditures on higher education in China? An empirical investigation

This paper investigates the spatial demonstration effects of local governments' fiscal expenditures on higher education in China. Using regional panel data from 1999 to 2015 and spatial econometric models, this paper finds that the developed region of Eastern China has not shown greater willingness to spend on higher education than the less developed regions of Central and Western China. Local governments' fiscal expenditures on higher education have significant spatial demonstration effects, which are strongest in Central China. The attenuation boundary test shows that, as the economic distance increases, the demonstration effect becomes weaker. Econometric models, including the interaction of economic growth and the spatial lag term show that the demonstration effect is enhanced by economic growth. Henceforth, this paper concludes that, to increase fiscal expenditures on higher education in China and save incentive costs, with the local governments being the main investors, the central government can achieve the goal of increasing the total fiscal expenditures on higher education by exerting the spatial demonstration effect. It will eventually drive local governments to spend more on higher education by strongly encouraging others beforehand.     

Private supplementary tutoring expenditures and children’s learning outcomes: Gender and locational evidence from Ghana

Many households in developing economies seek to address poor learning outcomes by investing in private supplementary tutoring (PST). We examined the effects of PST expenditures on learning outcomes and possible heterogeneous effects related to the child’s gender and locality. We use instrumental variable, propensity score matching, and the Lewbel procedures, and a sample of 2095 households from the 7th Ghana Living Standard Survey. We establish that when families invested in PST at the basic school level, their children’s ability to read, write, and do written calculations improved significantly. PST expenditures benefitted boys and children residing in rural areas more than girls and those living in urban areas. PST may be useful for improving learning outcomes, especially for children struggling academically, but any policy integration should be done tactfully to avoid exacerbating existing economically-induced educational inequalities.