Public versus Private Education in an Endogenous Growth Model with Social Status

This paper investigates which of publicly financed education or privately financed education is favorable for growth in an economy where development of new technology by specialists is the engine of growth and social rewards are bestowed upon growth enhancing activities. We show that when one quests for social status, the privately financed education could improve the allocation of human resource and the growth rate could become higher in the private finance regime than in the public finance regime.