The Effectiveness Analysis of Public Education and Health Expenditures

Abstract. This study examines the links between public education and health expenditures, and education and health outcomes- measured by the school life expactancy and rate of child (under five) mortality, life expactancy at birth. It also investigates the role of governance on the effectiveness of public education and health expenditures. The effectiveness of public education and health expenditures is examined within education and health production function by using 2002- 2012 data. Empirical results show that effects of socioeconomic and environmental factors and demographic structure on education and health outcomes are similar to those in previous studies. The results indicate two important findings. First, public education and health expenditures remain incapable to explain outcomes when compared to other socioeconomic variables. Second, increase in public education and health expenditures is associated with improved outcomes just in countries where regulatory quality and control of corruption is high. With a general expression, public education and health expenditures become more effective in countries with high governance level.Keywords. Public education expenditures, Public health expenditures, Child mortality rate, Life expactancy at birth, School life expactancy.JEL. I18, I28, H51, H52