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Advances in Social Sciences Research Journal – Vol. 8, No. 3

Publication Date: March 25, 2021

DOI:10.14738/assrj.83.9928. Sheikh, R. I. (2021). Distributional Effects of Public Educational Expenditures: Empirical Results from Cohort Analysis. Advances in

Social Sciences Research Journal, 8(3) 588-605.

Distributional Effects of Public Educational Expenditures:

Empirical Results from Cohort Analysis

Md. Rashidul Islam Sheikh

Associate Professor

Department of Public Administration, Comilla University.

Bangladesh-3505

ABSTRACTS

This article scanned the empirical analysis of the distributional

effects of public education expenditure using Gini coefficient of

education based on cross-sectional data across cohorts in

Bangladesh. The main purpose of this study was to investigate

whether education expenditure plays a role as a catalyst to diminish

education inequality across the country by increasing years of

schooling across levels of education. The Data set proved that overall

years of schooling increased while education expenditure increases

for a long time having slight fluctuations. Consequently, the Gini

coefficient of education gradually increased and the inequality of

education getting narrowed down across levels of education.

Distributional effects of public expenditure on education across

cohorts produced an exceptionally good result indicating positive

relationships between years of schooling and the Gini coefficient of

education. Despite the achievements of the education sector, the

government of Bangladesh has comprehended that in the public

sector education, there are substantial numbers of challenges make

it tough to get the best outcomes along with quality education and

insufficient budget flow across levels of education. This paper tended

to uncover education redistributive policy and the existence of

inequality in the cohorts across levels of education by estimating the

Gini coefficient of education in Bangladesh.

Key Words: public expenditure, education inequality, years of schooling,

Gini coefficient

INTRODUCTION

This paper discussed the empirical results of the distributional effects of public education

expenditures in Bangladesh in relation to education using Gini coefficients based on cohort in

Bangladesh. The public sector education has reliably received substantial budgetary allocation

from the government as the government tends to believe that the endowment of education to

each citizen is not only important for the country’s robust economic development but also

facilitates equally individual to benefit as well from different channels of education. This is the

reason to analyze whether the public education expenditure makes a bridge to reduce the

education inequality across the country and whether years of schooling is increasing across

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Sheikh, R. I. (2021). Distributional Effects of Public Educational Expenditures: Empirical Results from Cohort Analysis. Advances in Social Sciences

Research Journal, 8(3) 588-605.

589

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URL: http://dx.doi.org/10.14738/assrj.83.9928

levels of education in cohorts and education inequality is steadily declining-that is really

significant in Bangladesh. Despite the achievements of the education sector, the government of

Bangladesh has comprehended that in the public sector education there are substantial numbers

of challenges make it tough to get the best outcomes as well as quality education. This paper

tended to uncover education redistributive policy and the existence of inequality across levels of

education in the cohorts across the country by estimating Gini coefficient of education.

LITERATURE REVIEW

Beginning with income Gini, normally there are two methods to compute an income Gini; the

direct method (Deaton Angus S., 1997) as well as the indirect method. Statistically, the direct

method explains that income Gini is defined as "the ratio to the mean of half of the average overall

pairs of the absolute deviations between [all possible pairs of] people" (Deaton Angus S., 1997).

Conversely, the indirect method first builds the income Lorenz curve, with the aggregate ratio of

the income on the vertical axis, and the aggregate ratio of the population on the horizontal axis

(Deaton Angus S., 1997), and the produced 45degree line is called the egalitarian line for it

exemplifies an entirely equal society with respect to the distribution of income. And then the Gini

is calculated as the percentage of two areas, with the area of the egalitarian triangle as the

denominator and the area between Lorenz curve and the egalitarian line as the numerator

(Deaton Angus S., 1997).

Correspondingly, both the direct method and the indirect method can similarly apply to the

education Gini. As a referend to Deaton's definition, education Gini measures the ratio to the

mean (average years of schooling) of half of the average schooling deviations between all

possible pairs of people (Thomas, Wang, & Fan, 2001). Under the study, Gini coefficients of

education method will apply for measuring the education inequality based on cohort analysis in

Bangladesh using cross-sectional data.

So far, my knowledge, maximum of the previous literature that studied income inequality

considering as a proxy of wealth inequality. Academically, income inequality boosts economic

growth up by increasing aggregate savings, since the marginal propensity of rich/wealthier

people to save is higher than that of poor people (Kaldor, 1955; Kuznet, 1955). On the contrary,

income inequality inversely affects growth in expansionary fiscal policy (Perotti, 1993), in

incompetent bureaucracy (Acemoglu, Ticchi, & Vindigni, 2011) or in political unsteadiness

(Benabou, 1996). It could also hamper growth by lowering investment in human capital in poor

families or by reducing human capital accumulation (Galor & Moav, 2004; Joseph & Oded, 2013).

Another study acknowledged that positive or negative effects of inequality on economic growth

may change over time, regardless of long- or short-term effects; for instance, channels like

expansionary fiscal policy or human capital accumulation take longer time to affect growth

(Halter, Oechslin, & Zweimüller, 2014).

But very few studies examined direct education inequality in a particular country like

Bangladesh, which is also characterized as a developing country. And most of the research is

based on either a case study or cross-country analysis in the case of education inequality. A case

study in Sabah, Malaysia from 2009 to 2013 proved that education inequality in rural areas is

always higher than that of urban areas and also shows the education inequality is more in rural

areas where the number of schools tend to be high (Tan, Ho, & Pang, 2016). Measuring education

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Advances in Social Sciences Research Journal (ASSRJ) Vol. 8, Issue 3, March-2021

Services for Science and Education – United Kingdom

inequality by constructing a Gini index on educational attainments found that average years of

education have a robust negative impact on measured income inequality where public

expenditure on education is considered (Checchi, 2001). Education worldwide is perceived as a

tonic for rising inequality which most of the time goes with development. It is assumed that many

developing countries tend to spend more toward higher studies that benefits the upper class

disproportionately. As many developing countries tilt expenditure to higher education, the study

recommends that determination focuses only on mass education, for example, the UN’s

Millennium Campaign, may end up raising inequality in most of the developing countries (Gruber

& Kosack, 2014). The pooled assessments using a probit model shows for all levels of education,

except for the higher one, the distribution is getting nearer to the perfect equity line on the

education Lorenz Curve, where reduction in inequality depended on some factors like household

income, location that lead to reduce Gini coefficient of education (Banzragch, Mizunoya, &

Bayarjargal, 2019). Analyzing the pattern of educational inequality using education Gini in NSSO

71st Round, Indian States, we show that there is more educational inequality exists and allure us

to comprehend whether educational inequality is pro-poor or pro-rich in nature (Dutta, 2017).

Education inequality measure by Gini is a new concept in terms of country context studies,

especially primary, secondary, and higher levels of education showing public disbursement

impacts on year of schooling and the Gini coefficients of education. A study in China showing

disintegration results using Gini and Shapley value built on regression indicating the utmost

contributing elements to educational inequality involve the urban-rural as well as social

stratification divisions. In addition, the population from economically underprivileged areas still

warrants social concern, especially about education inequality (Yang, Huang, & Liu, 2014).

A study in Albania and Nepal applying large household survey data show that there exists

significant education inequality in terms of education attainment which is determined by socio- economic, demographic as well as geographical factors (Devkota & Upadhyay, 2016). In Nigeria,

using household data from the World Bank, show the household characteristics and educational

achievement affect educational inequality (Umar, 2017). Educational attainment and per capita

income affect increasing education inequality. Another study exposed (in)equity is higher among

male, minority, and students from periphery; and (in)equity increases along the examined years

(Dadon-Golan, BenDavid-Hadar, & Klein, 2019). The more or less some result shows in the study

of U.S.A by age group and sex using education attainment data which indicate a declining trend

of education inequality in the time frame of 1950-2009. The study also indicates that the

education inequality is more among males compared to females (Bennett, 2012).The Gini of

educational expenditure of an average student for compulsory education is becoming less over

the year showing the huge gaps between categories of economic development in terms of Gini

and in terms of per student expenditure for compulsory education (Wen, 2019). But the year of

schooling is a very crucial factor along with the birth year that may reveal the real gaps in the

educational attainment of a particular country and can show us the real scene of educational

inequality in that region or country. Another study argues that average years of schooling as well

as GDP per capita shows negative slopes where tertiary education tends to reduce education

inequality (Ziesemer, 2016). In addition, a research measuring education inequality in coastal

and inland provinces in the context of rural-urban inequality using Gini coefficients and, the

major argument is, disparities in terms of access to education among rural-urban rather than

between coastal and inland provinces are the main cause of education inequality in China (Qian