The effectiveness of government expenditure on education and health care in the Caribbean

Abstract

PurposeInvestment in human development is considered a means of improving the quality of life and sustaining economic growth in the Caribbean. The purpose of this paper is to assess the efficacy of public spending on health care and education by evaluating the life expectancy and school enrolment rates of these countries.Design/methodology/approachUsing a data set containing 19 Caribbean countries over the period 1995 to 2007 for health care and 1980 to 2009 for education, a Panel Ordinary Least Squares model was employed.FindingsThe results revealed that health expenditure has a significant positive effect on health status, while spending on education has no appreciable influence on either primary or secondary school enrolment.Originality/valueUnlike previous Caribbean research, the paper explores a variable for quality in the education system, that is, the pupil‐teacher ratio. It also seeks to update the existing Caribbean literature by employing data from 1980 to 2009.