Academic literature on the topic 'Public education spending'

This article looks at fifty years’ worth (1970-2020) of public K-12 education expenditure data from the Canadian province of British Columbia. It asks if spending has increased or decreased in this period and examines the causes and correlates of spending changes. Previous research has tended to assume that spending has decreased during this “neoliberal” period. However, historical and empirical research in this article gives a much different picture. K-12 public education spending in British Columbia – adjusted for inflation – is 250 percent higher in 2020 than it was in 1970. Meanwhile, enrolment in 2020 is only 110 percent of 1970 enrolment. The main cause of spending growth is increase in the number of teachers the system employs, which depended in no small part on the British Columbia Teachers’ Federation (BCTF)’s successful attempts to negotiate class size and composition rules. Other causes of spending growth are provincial and district spending priorities. Successive provincial governments have tried to rein in education spending by legislating cost controls on district spending and teacher contracts but have seldom achieved reductions for long. Spending increases and attempts at cost control are at best only linked partially to governing party ideology, with right-wing and left-wing provincial governments both initiating years of increases and cutbacks. More empirical research is needed, especially into spending’s effects on educational equity and quality, to complete the picture of education finance in British Columbia.

Using new estimates of state-level public opinion, I explore the relationship between support for increased education spending and statewide per-pupil expenditures from 1986 to 2013. In the 1980s, there was a modest, positive relationship between public opinion and actual spending: States with greater support for increased education spending tended to have slightly higher per pupil expenditures. Over the next three decades, this relationship reversed. States with relatively low per-pupil expenditures tended to increase their spending at a slower rate despite steady growth in support for more spending. As a result, public opinion and education spending became inversely related. By the end of the time series, states with greater support for increased education spending tended to spend less per pupil. The changing distribution of local, state, and federal sources of education spending partially explains this pattern. As federal education expenditures rose, some states spent proportionally less from state and local sources, resulting in smaller overall spending increases in those states.

For nearly two decades, the state of Texas mandated gifted education services and provided funding to public school districts. One policy that was unique to the state is the mandatory minimum spending. This research examines how these mandatory minimum spending floors influence spending in public school districts within the state and how that influence varies across locales. Our findings provide evidence that rural public school districts in Texas were more likely to operate near to the mandatory state minimum spending for gifted education than non-rural public school districts. In particular, rural public school districts allocated 50% of the funds towards gifted education programming as suburban public school districts when the minimum spending floors was accounted for. The results should provide caution to policy makers on the possible ramifications of removing spending floors on gifted education programming in rural public school districts.

Abstract We explore the history behind the current structure of graduate medical education funding and the problems with continuing along the current funding path. We then offer suggestions for change that could potentially manage this health care spill. Some of these changes include attracting more students into primary care, aligning federal graduate medical education spending with future workforce needs, and training physicians with skills they will require to practice in systems of the future.

Existe un amplio consenso, tanto entre académicos como entre decisores políticos, sobre el cúmulo de beneficios derivados de la educación. Mejorar el nivel educativo de la población se ha identificado como un factor clave para el crecimiento económico y el desarrollo; pero también para el avance de la democracia, la movilidad social y la realización individual. La potencia de estas ventajas suele ser recogida en los discursos políticos, que consideran el progreso educativo un objetivo esencial para el desarrollo. Sin embargo, la amplitud de este consenso parece tornarse más difuso a la hora de asignar recursos públicos. Entonces, objetivos macroeconómicos y técnicos, presiones de las elites sociales o intereses políticos de los partidos gobernantes terminan configurando las opciones de política. Esta tesis analiza el gasto público en educación y sus resultados. Adopta una doble perspectiva: considera grupos de países y su dinámica en el tiempo. Sus tres capítulos exploran diferentes aspectos del tema y buscan respuestas a preguntas como las siguientes: ¿cómo y por qué los recursos públicos se traducen en resultados educativos valiosos? ¿Por qué algunos países obtienen mayores beneficios del gasto en educación que otros? ¿Qué motivación impulsa a los políticos a dar prioridad al gasto en educación? El primer estudio aborda la eficiencia del gasto en educación: provee evidencia sobre su evolución y posibles determinantes. Sostiene que en entornos de baja inversión pública, el mero aumento de la eficiencia del gasto en educación no resulta suficiente para mejorar los resultados. En el segundo capítulo se evalúa el impacto de la educación terciaria sobre la productividad. El trabajo muestra que los retornos sociales de este nivel educativo están condicionados por el monto de recursos que concentra a expensas de los niveles masivos de educación y por la proporción de estudiantes matriculados en áreas de conocimiento vinculadas a las matemáticas, física y ciencias de la vida. Por último, en el tercer capítulo se realiza un análisis de historia económica. Se investiga en qué medida la decisión sobre el monto de recursos fiscales destinados a la expansión de la educación primaria en Uruguay ha estado marcada por intereses y tácticas políticas. La conclusión apunta a que, efectivamente, al distribuir fondos para la educación primaria en el territorio, los partidos de gobierno han ponderado su fortaleza política en las diferentes regiones. A través de los diferentes capítulos se ha prestado especial atención al desempeño de países de América Latina (AL). En particular, los dos primeros capítulos examinan las economías de ingreso medio alto de la región en comparación con otros países en desarrollo y desarrollados durante el período 1970-2010. Por su parte, el último capítulo se centra en el caso de Uruguay durante la primera mitad del siglo XX.
The numerous benefits arising from education have become a consensual issue among scholars and policy-makers. Education has been recognized as a key factor of economic growth and development; and also of democracy, social mobility and individual fulfillment. The strength of these advantages has reached the political discourses, which have often seen education upgrading as a crucial development goal. However, this widespread agreement becomes hazy when it comes to the decisions about the allocation of public resources. Then, macroeconomic and technical objectives, pressures of social elites or political interests of governing parties seem to end up shaping policy choices. This dissertation examines public education spending and educational outcomes across countries and over time. Its three chapters explore different aspects of the topic and delve into questions like: how (and why) public resources are translated into valued educational outputs? Why do some countries obtain more benefits from education spending than others? What drives policy makers to prioritize education spending? Hence, a first study on the efficiency of public education outlays provides empirical evidence about its evolution and determinant factors. It argues that in low spending settings the mere efficiency increase would not be enough to lead to better educational outcomes. The second chapter performs an evaluation of the productivity impacts of higher education focusing on the structure of education spending among levels and on the skill profile of tertiary students. The analysis shows that the benefits from higher education are conditioned by the range of fiscal resources it captures at the expense of primary schooling and the share of students trained at the fields of mathematics, physics and life sciences. Finally, the last chapter adopts an economic history perspective. It analyses whether the extent of the government fiscal commitment to expand primary education in Uruguay has been explained by the interests of tactically motivated politicians. It concludes that, when distributing basic education funds, the ruling party weighted its political strengths across the country regions. All chapters pay special attention to the performance of Latin American countries (LACs). The first two chapters examine upper-middle LACs in the context of a set of developed and developing economies for the period 1970-2010. In turn, the last chapter focuses on the case of Uruguay during the first half of the 20th century.

This study investigated the impact of public spending on enrolments in primary and secondary education in Nigeria using a multiple regression model. The model was constructed to identify the relationship between government spending, primary and secondary enrolments rate while also considering the interaction with control variables; per capita income, workers remittances, and population growth. Using the OLS approach to analyse the data for the period 1981 to 2013. Interesting observations were made which are explained for by inconsistency in government allocation or spending on education in Nigeria. It was observed that a significant positive relationship exists between per capita income, government spending, and primary school enrolment rates while a negative relationship exists between population growth, workers' remittances and primary education enrolment. As for secondary education enrolment rate, there is a positive relationship between per capita income, population growth but a negative relationship with government spending and workers' remittances due to the fee-paying secondary schools and interest in informal trade. These findings add nuance to the understanding of the variables affecting education enrolment rates in Nigeria beyond that of government spending, to other variables which are critical to the structure of the economy given its high immigration and out of school children population. This study is part of the growing empirical literature addressing education finance and outcomes gap. Beyond the consistency required in financing, the Nigerian government must build infrastructure that will support improvement in the overall social wellbeing of the growing populace and encourage transition into secondary schools.

Title I of the Elementary and Secondary Education Act (ESEA) of 1965 was originally created to ensure academic equity and opportunity for all students. As the largest federal program supporting elementary and secondary education, providing nearly $11.6 billion annually, Title I targets resources to local education agencies (i.e., school districts) to support additional programs and services for improving student achievement. Despite expansive reform efforts, political cries for accountability, and standardized testing, urban school-wide elementary school students are still--in large numbers --experiencing failure and defeat. The process of determining how Title I funds can be used effectively to address the needs of disadvantaged students is quite often multi-layered and complex. Due to the limited availability to research to support Title I coordinators in determining how to purposefully utilize Title I funds to supplement the disadvantages of urban elementary school students, the extent to which Title I funds are supporting and/or contributing to the transformation of low-performing Title I schools is relatively unknown. The focus of this mixed-methods study was to provide important insight into the appropriateness of federal funding of the No Child Left Behind Act (NCLB, 2001), in particular Title I funds, that support and/or contribute to the academic achievement of high poverty Title I elementary schools. Four data collection tools were employed in this study: Document review of the Single Plan for Student Achievement for 10 elementary schools serving high poverty, low-performing student populations, survey questionnaire sent to 10 Title I coordinators serving at school-wide Title I elementary schools, a follow-up questionnaire interview to gather further insight into the survey questionnaire responses, and open-ended response interviews conducted with 4 Title I coordinators to understand the challenges and obstacles that impede their ability to address the needs of Title I students. Results of this study provide local education agencies, schools, and Title I coordinators with research-based data regarding the impact of Title I funds to support high poverty, historically low-performing students.

Thesis (M.A.)--University of North Carolina at Chapel Hill, 2009.
Title from electronic title page (viewed Mar. 10, 2010). "... in partial fulfillment of the requirements for the degree of Master in the Department of Political Science Trans-Atlantic Masters Program." Discipline: Political Science; Department/School: Political Science.

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The aim of this study is to evaluate the quality of public spending on education in the city of Meruoca. It uses non-parametric methodology of DEA (Data Envelopment Analysis - DEA) to estimate levels of efficiency, whereas indicators of input and product and elementary education for all municipalities in Ceara. Thus, it will generate robust rankings of efficiency that enables you to check which places the city of Meruoca. In order to contextualize the analysis of efficiency, are also considered major programs that affect spending on education and the state of Cearà is analyzed descriptive characteristics and management in education Meruoca. The results of this study point to an efficient management of education in the municipality of Meruoca, especially in early childhood education.
O principal objetivo deste trabalho à avaliar a qualidade dos gastos pÃblicos em educaÃÃo do municÃpio de Meruoca. Utiliza-se a metodologia nÃo-paramÃtrica de anÃlise envoltÃria de dados (Data Envelopment Analysis - DEA) estima-se Ãndices de eficiÃncia, considerando indicadores de insumo e produto da educaÃÃo infantil e fundamental para todos os municÃpios cearenses. Dessa forma, gera-se rankings robustos de eficiÃncia o que possibilita verificar onde se posiciona o municÃpio de Meruoca. Com o objetivo de contextualizar a anÃlise de eficiÃncia, tambÃm sÃo analisados os principais programas que influenciam os gastos em educaÃÃo nos municÃpios cearenses e à feita uma anÃlise descritiva caracterÃstica da gestÃo em educaÃÃo em Meruoca. Os resultados deste trabalho apontam para uma eficiente gestÃo da educaÃÃo no municÃpio de Meruoca, principalmente, na educaÃÃo infantil.

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The low levels of human capital across most of the population within underdeveloped countries is believed to be a major obstacle for economic growth and development. This paper proposes an overlapping generations model, with fertility and education choices, to investigate the impact of public education on inequality and fertility across households of di erent levels of income. Testing the model calibrated with recent data from Brazil with di erent amounts and e ciency levels for public investment in education indicates that there is much to gain in terms of inequality reduction and income gains by improving quality of education than just spending more resources on it.
Acredita-se que baixos níveis de capital humano através da maior parte da população em países subdesenvolvidos seja um dos principais obstáculos para crescimento e desenvolvimento econômico. Este artigo propõe um modelo de gerações superpostas, com escolha de fertilidade e educação, para investigar o impacto da educação pública em desigualdade e fertilidade através de domicílios com diferentes níveis de renda. Testes com o modelo calibrado com dados recentes do Brasil, usando diferentes quantidades e níveis de eficiência para o investimento público em educação, indicam que há bastante a se ganhar aumentando a qualidade da educação do que somente gastando mais recursos.

The first chapter provides an introduction to my investigation of the impact of state-level educational investments in public K-12 education on future labor markets, specifically earnings and employment. In Chapter 2, the current literature supporting this investigation is examined while I offer a hole in the literature that I intend to fill. Then, in Chapter 3 I present a two-period, balanced-budget theoretical model in which I relate educational investments, mobility, and future earnings. This theoretical model is then implemented in Chapter 4 using state-level data and again in Chapter 5 using individual-level data. Chapter 4 examines the impact of state-level educational investments in public education on aggregate state labor markets, specifically earnings and employment. Using data on K-12 educational spending, 8th grade cognitive test scores, and educational demographics of a state’s labor force, I observe the impact these state-level investments have on employment and earnings growth. Taking interstate migration into account, I separate the benefits from educational investment into benefits due to in-state investment and benefits due to out-of-state investment. By doing so I am able to identify whether or not educational investment spillovers exist between states. Results indicate that the earnings benefits associated with public K-12 educational spending spill over into other states, 8th grade NAEP test scores do not spill over into other states, and neither has a significant impact on other states’ employment growth. Chapter 5 examines the impact of educational investments in public education on earnings of individuals. I extend my analysis from Chapter 4 by employing micro-data (on individuals) from the American Community Survey (ACS) instead of using state-level data. Using micro-data allows me to more accurately measure the investments used in the education of an area and to incorporate where education was attained and where it was employed. Using individual-level data also allows me to narrow my focus to younger participants in the labor force, providing a stronger link between lagged educational spending and earnings. Results indicate that K-12 educational spending does spill over in the form of positive earnings benefits, which helps to support the results of Chapter 4.

This study contributes to the literature on the economic value of higher education by examining the extent to which a set of independent variables, including two measures of state spending on higher education predict the formation of human capital. The findings suggest that, in most states, increases in state spending per full-time equivalent enrollment in public higher education predict decreases in the formation of human capital, while increases in state spending per capita on public and private higher education predict increases in the formation of human capital. This suggests that the relationship between state spending on higher education and the formation of human capital is dependent on the measure of state spending used. Attempts to increase the formation of human capital should focus on increasing state spending per capita on public and private higher education. This study also analyzes time-series data from states, grouped by income inequality and changes in productivity, to examine the extent to which changes in a single measure of state spending on higher education predict changes in the formation of human capital. The results indicate that increases in state higher education spending do not benefit all states. Increases in state higher education spending predict increases in the formation of human capital in states with low productivity growth and in states with low levels of income inequality. In states with high productivity growth, increases in state higher education spending predict decreases in the formation of human capital.
Ph. D.

Human capital is the main source of the country's economic development. The quality of human capital is determined by the level of public health and education. Expenditures on education and health care allow increasing the stock of human capital and the productivity of labor resources thereby accelerates the process of economic development in the long term. In this regard, public spending on education plays an important role in the formation of human capital. After the collapse of the USSR, the Kyrgyz Republic experienced serious economic crises. Public spending declined sharply, as transfers from the budget of the USSR to budget of Kyrgyz Sovyet Republic was 8 to 14% of the state revenues. The loss of economic ties and the market with other republics led to the reduced output significantly. Despite crises, Kyrgyzstan is one of the post-Soviet countries that was able to preserve the educational system. The purpose of this study is analyzing the causal relationship between government spending on education and the gross domestic product in Kyrgyzstan. In the empirical analysis, monthly data on government spending on education and GDP will be used from 2000: 1 to 2015: 8, using a cointegration test for the existence of a long-term relationship, built on the basis of autoregression with distributed lags as known the ARDL model.

Public education and health care infrastructure spending positively affect regional economic performance and develop regional competitive position through increasing workforce efficiency. While this type of investment is viewed as investment toward developing human capital, development of human capital stock may determine innovative forms of economies and technological applications, which can also be spilled over via human capital. Because of this, region wide educational and health care infrastructure spending aimed towards development of human capital can provide an increase in regional income and welfare. This study, aiming to identify effect of educational and health care infrastructure spending on development of human capital at regional level in Turkey, used regional data 2004-2008 Level-2. According to results obtained from the panel data fixed effect method, this type of spending can influence regional income. At regional level, the greatest positive effect has been observed in West Marmara region, the smallest effect was realized in Northeast Anatolian Region.

The purpose of this article is to evaluate the efficiency of public higher education investment in Vietnam’s economic growth through data reports from the Ministry of Education and Training, Ministry of Finance, the General Statistics Office, and the primary investigation of the authors. The paper focuses on an in-depth analysis of the costs of investing in higher education, such as state budget spending on higher education, the impact of budget expenditure on growth, individual investment (household) investment in public higher education, social costs for higher education public study, and average social cost for one learner. From the above analysis, the authors will present employment status and the impact of the problem on both economic growth and the average income of workers by technical expertise. Besides, the authors will compare the situation of investment in higher education and the economic growth rate of Vietnam to some countries in Southeast Asia. From there, the authors will determine the limitations of this impact process. Based on that, the authors will propose some solutions to improve the efficiency of investment in public higher education for Vietnam’s economic growth.

European welfare states, with their comprehensive and generous welfare model, create the largest part of general government expenditures in the European Union member countries. Given the rising trend of social expenditure and the long-run challenges coming from population ageing, this paper addresses the issue of social dominance, a situation in which, particularly when facing limited fiscal space, social expenditure could crowd-out other productive public expenditures, thus undermining growth potentials and possibly threatening fiscal sustainability. Using a panel regression analysis, the aim of the paper is to test whether social protection expenditure has crowded-out expenditures on other purposes in the European Union in the period 1995-2018. The results provide some evidence of crowding-out of infrastructure spending and education spending. Additionally, deficit financing and rising government debt have a significant adverse effect on spending on infrastructure, education and core public services, confirming that they are more prone to cutbacks in times of deteriorating public finance. These findings, along with the long-run fiscal pressure from the ‘greying population’ and the high political costs of welfare reforms suggest significant future risks of social dominance.

The realization of economic growth in order to grow and develop an economy and increase social welfare is one of the basic aims of every society. For this reason, states are making great efforts to realize economic growth and make it sustainable. In this context, the impact of public expenditure on the economic growth of countries is a matter of research. Government spending can be classified economically as expenditure on capital and current expenditures, functionally as general public services, defense services, education services, public order and security services, economic affairs and services, environmental protection services, health services and other services. There are also investment expenditures made by the government for economic development. In particular, public investment expenditures complementary to private investments have positive effects on growth. The Kazakhstan and Kyrgyzstan economies, which are in the category of developing countries, are looking for ways to achieve development and growth and are implementing various practices and economic policies in this process. In this context, Kazakhstan and Kyrgyzstan have the main purpose of studying and analyzing the effects of the public expenditures that they think will be effective on economic growth. The various variables of public spending in the study were examined with the Karma Average Group (PMG) model, which shows how Kazakhstan and Kyrgyzstan's growth affected their growth in the short and long term. As a result, public spending has been influenced by economic growth and it has been determined which components are active on a country basis.

This work aims to present the platform on government accountability. named “Cuidando do Meu Bairro” ("Caring for My Neighborhood"), which is a social platform for monitoring and controlling the town´s public spending. The work shows its concept evolution based on stakeholders feedback during the last 8 years that the platform has been contributing to governmental accountability and social participation, The functionalities and software architecture are presented. Also, the main outcomes and social impact that this project provided on civic education, fight against corruption, public transparency and social participation are briefly presented.

As stated in the literature, the educational level of the population is a precursor to the economic growth of the country. However, the current problem is the leakage of highly qualified labour abroad due to insufficient job opportunities or weak financial rewards in the home country. The state's investment in tertiary education becomes irreversible. In this context, the aim of the paper is to identify whether there are disparities in the highly qualified workforce in terms of funding and numbers between the countries of the European Union. The subject of the research is public expenditure on tertiary education (% of GDP per capita) and the share of tertiary educated population in the country (% of the total population of the country). In the paper we use data collected for the period 2011 – 2020. For this reason, they are the subject of research of the countries of the European Union, including the United Kingdom. To identify disparities, we use the method of absolute β-convergence, supplemented by σ-convergence, linear regression, and cluster analysis. The results show that when evaluating public spending on tertiary education, there are disparities when economically strong European countries will diverge. When examining the share of the tertiary educated population, there is a convergence of countries. However, disparities occur in terms of employment of women and men up to 1-3 years after tertiary education.

Background: Tanjung Jabung Timur Regency is a district where filariasis is endemic. In 2018, the Microfilaria rate (Mf rate) was 1.33% and is the only district / city in Jambi Province with an Mf rate > 1%, so mass treatment was performed again for 2 years (2017-2018), but cases have still been identified. Novelty in 2019. This study aimed to analyze the relationship between the incidence of filariasis in the physical, biological, social and cultural environment and the dominant factors in the incidence of filariasis. Subjects and Method: This was a case control design conducted in Tanjung Jabung Timur Regency from March to July 2020. Total of 84 patients with filariasis were enrolled in this study. The dependent variable was the incidence of filariasis while the independent variables were the socio-cultural environment and individual characteristics (age, education, occupation, income, level of knowledge, spending habits of the day, preventive measures, and compliance with prophylactic medication), attitude (physical environment), The data were collected using questionnaire and environmental observation. Data were analyzed using a multiple logistic regression. Results: Most of patients with filariasis were male (61.9%), had low education (73.8%), was a farmer, and 60% had a job at risk of developing filariasis. Age (OR = 0.16 ; 95%CI= 0.06 to 0.41), education (OR = 4.50 ; 95%CI= 1.56 to 12.96), occupation (OR = 4.66, 95% CI = 1.76 to 12.31), adherence to taking prophylactic medication (OR = 4.70, 95% CI = 1.83 to 12.04) were affected on the filariasis incidence. Adherence to taking prophylactic drugs was the most dominant risk factor for filariasis (OR = 12.97; 95% CI = 3.35 to 50.15). Conclusion: Following control for resting place, occupation, age and height of residence, the most dominant factor in the incidence of filariasis is adherence to taking prophylactic drugs. Keywords: adherence, prophylaxis, filariasis, risk factors, environment Correspondence: Ummi Kalsum. Study Program of Public Health, Universitas Jambi. Jl. Tri Brata, Km 11 Unja Campus Pondok Meja Mestong, Kab. Muaro Jambi. Email: ummi2103@unja.ac.id. Mobile: 081314385775 DOI: https://doi.org/10.26911/the7thicph.01.16

Public spending on education has increased significantly in Latin America over the last decades. However, less is known whether increased spending has been translated into a more equitable distribution of resources within countries in the region. This study addresses this gap by measuring the inequality in per-pupil spending between regions with different levels of socioeconomic status (SES) within five Latin American countries: Brazil, Chile, Colombia, Ecuador, and Peru. Results show that Brazil, a federal country, has the widest socioeconomic funding gap due to large inequalities in local revenues between high and low SES regions. However, the country's funding gap has narrowed over time. School funding in Colombia has become more regressive over time, but its gap is half the size of the one in Brazil. The distribution of school funding in Peru has changed over time from being regressive-benefiting the richest regions-to being progressive-benefiting the poorest regions. Education spending in Chile and in Ecuador are, on the other hand, consistently progressive. However, while the progressiveness of funding in Ecuador is driven by transfers targeted at disadvantaged rural areas, the funding formulas in Chile addresses socioeconomic inequalities beyond the rural-urban gap.

In the decade after the Civil Rights Act of 1964, African Americans made historic gains in accessing employment opportunities in racially integrated workplaces in U.S. business firms and government agencies. In the previous working papers in this series, we have shown that in the 1960s and 1970s, Blacks without college degrees were gaining access to the American middle class by moving into well-paid unionized jobs in capital-intensive mass production industries. At that time, major U.S. companies paid these blue-collar workers middle-class wages, offered stable employment, and provided employees with health and retirement benefits. Of particular importance to Blacks was the opening up to them of unionized semiskilled operative and skilled craft jobs, for which in a number of industries, and particularly those in the automobile and electronic manufacturing sectors, there was strong demand. In addition, by the end of the 1970s, buoyed by affirmative action and the growth of public-service employment, Blacks were experiencing upward mobility through employment in government agencies at local, state, and federal levels as well as in civil-society organizations, largely funded by government, to operate social and community development programs aimed at urban areas where Blacks lived. By the end of the 1970s, there was an emergent blue-collar Black middle class in the United States. Most of these workers had no more than high-school educations but had sufficient earnings and benefits to provide their families with economic security, including realistic expectations that their children would have the opportunity to move up the economic ladder to join the ranks of the college-educated white-collar middle class. That is what had happened for whites in the post-World War II decades, and given the momentum provided by the dominant position of the United States in global manufacturing and the nation’s equal employment opportunity legislation, there was every reason to believe that Blacks would experience intergenerational upward mobility along a similar education-and-employment career path. That did not happen. Overall, the 1980s and 1990s were decades of economic growth in the United States. For the emerging blue-collar Black middle class, however, the experience was of job loss, economic insecurity, and downward mobility. As the twentieth century ended and the twenty-first century began, moreover, it became apparent that this downward spiral was not confined to Blacks. Whites with only high-school educations also saw their blue-collar employment opportunities disappear, accompanied by lower wages, fewer benefits, and less security for those who continued to find employment in these jobs. The distress experienced by white Americans with the decline of the blue-collar middle class follows the downward trajectory that has adversely affected the socioeconomic positions of the much more vulnerable blue-collar Black middle class from the early 1980s. In this paper, we document when, how, and why the unmaking of the blue-collar Black middle class occurred and intergenerational upward mobility of Blacks to the college-educated middle class was stifled. We focus on blue-collar layoffs and manufacturing-plant closings in an important sector for Black employment, the automobile industry from the early 1980s. We then document the adverse impact on Blacks that has occurred in government-sector employment in a financialized economy in which the dominant ideology is that concentration of income among the richest households promotes productive investment, with government spending only impeding that objective. Reduction of taxes primarily on the wealthy and the corporate sector, the ascendancy of political and economic beliefs that celebrate the efficiency and dynamism of “free market” business enterprise, and the denigration of the idea that government can solve social problems all combined to shrink government budgets, diminish regulatory enforcement, and scuttle initiatives that previously provided greater opportunity for African Americans in the government and civil-society sectors.

1.1 Macroeconomic summary Economic recovery has consistently outperformed the technical staff’s expectations following a steep decline in activity in the second quarter of 2020. At the same time, total and core inflation rates have fallen and remain at low levels, suggesting that a significant element of the reactivation of Colombia’s economy has been related to recovery in potential GDP. This would support the technical staff’s diagnosis of weak aggregate demand and ample excess capacity. The most recently available data on 2020 growth suggests a contraction in economic activity of 6.8%, lower than estimates from January’s Monetary Policy Report (-7.2%). High-frequency indicators suggest that economic performance was significantly more dynamic than expected in January, despite mobility restrictions and quarantine measures. This has also come amid declines in total and core inflation, the latter of which was below January projections if controlling for certain relative price changes. This suggests that the unexpected strength of recent growth contains elements of demand, and that excess capacity, while significant, could be lower than previously estimated. Nevertheless, uncertainty over the measurement of excess capacity continues to be unusually high and marked both by variations in the way different economic sectors and spending components have been affected by the pandemic, and by uneven price behavior. The size of excess capacity, and in particular the evolution of the pandemic in forthcoming quarters, constitute substantial risks to the macroeconomic forecast presented in this report. Despite the unexpected strength of the recovery, the technical staff continues to project ample excess capacity that is expected to remain on the forecast horizon, alongside core inflation that will likely remain below the target. Domestic demand remains below 2019 levels amid unusually significant uncertainty over the size of excess capacity in the economy. High national unemployment (14.6% for February 2021) reflects a loose labor market, while observed total and core inflation continue to be below 2%. Inflationary pressures from the exchange rate are expected to continue to be low, with relatively little pass-through on inflation. This would be compatible with a negative output gap. Excess productive capacity and the expectation of core inflation below the 3% target on the forecast horizon provide a basis for an expansive monetary policy posture. The technical staff’s assessment of certain shocks and their expected effects on the economy, as well as the presence of several sources of uncertainty and related assumptions about their potential macroeconomic impacts, remain a feature of this report. The coronavirus pandemic, in particular, continues to affect the public health environment, and the reopening of Colombia’s economy remains incomplete. The technical staff’s assessment is that the COVID-19 shock has affected both aggregate demand and supply, but that the impact on demand has been deeper and more persistent. Given this persistence, the central forecast accounts for a gradual tightening of the output gap in the absence of new waves of contagion, and as vaccination campaigns progress. The central forecast continues to include an expected increase of total and core inflation rates in the second quarter of 2021, alongside the lapse of the temporary price relief measures put in place in 2020. Additional COVID-19 outbreaks (of uncertain duration and intensity) represent a significant risk factor that could affect these projections. Additionally, the forecast continues to include an upward trend in sovereign risk premiums, reflected by higher levels of public debt that in the wake of the pandemic are likely to persist on the forecast horizon, even in the context of a fiscal adjustment. At the same time, the projection accounts for the shortterm effects on private domestic demand from a fiscal adjustment along the lines of the one currently being proposed by the national government. This would be compatible with a gradual recovery of private domestic demand in 2022. The size and characteristics of the fiscal adjustment that is ultimately implemented, as well as the corresponding market response, represent another source of forecast uncertainty. Newly available information offers evidence of the potential for significant changes to the macroeconomic scenario, though without altering the general diagnosis described above. The most recent data on inflation, growth, fiscal policy, and international financial conditions suggests a more dynamic economy than previously expected. However, a third wave of the pandemic has delayed the re-opening of Colombia’s economy and brought with it a deceleration in economic activity. Detailed descriptions of these considerations and subsequent changes to the macroeconomic forecast are presented below. The expected annual decline in GDP (-0.3%) in the first quarter of 2021 appears to have been less pronounced than projected in January (-4.8%). Partial closures in January to address a second wave of COVID-19 appear to have had a less significant negative impact on the economy than previously estimated. This is reflected in figures related to mobility, energy demand, industry and retail sales, foreign trade, commercial transactions from selected banks, and the national statistics agency’s (DANE) economic tracking indicator (ISE). Output is now expected to have declined annually in the first quarter by 0.3%. Private consumption likely continued to recover, registering levels somewhat above those from the previous year, while public consumption likely increased significantly. While a recovery in investment in both housing and in other buildings and structures is expected, overall investment levels in this case likely continued to be low, and gross fixed capital formation is expected to continue to show significant annual declines. Imports likely recovered to again outpace exports, though both are expected to register significant annual declines. Economic activity that outpaced projections, an increase in oil prices and other export products, and an expected increase in public spending this year account for the upward revision to the 2021 growth forecast (from 4.6% with a range between 2% and 6% in January, to 6.0% with a range between 3% and 7% in April). As a result, the output gap is expected to be smaller and to tighten more rapidly than projected in the previous report, though it is still expected to remain in negative territory on the forecast horizon. Wide forecast intervals reflect the fact that the future evolution of the COVID-19 pandemic remains a significant source of uncertainty on these projections. The delay in the recovery of economic activity as a result of the resurgence of COVID-19 in the first quarter appears to have been less significant than projected in the January report. The central forecast scenario expects this improved performance to continue in 2021 alongside increased consumer and business confidence. Low real interest rates and an active credit supply would also support this dynamic, and the overall conditions would be expected to spur a recovery in consumption and investment. Increased growth in public spending and public works based on the national government’s spending plan (Plan Financiero del Gobierno) are other factors to consider. Additionally, an expected recovery in global demand and higher projected prices for oil and coffee would further contribute to improved external revenues and would favor investment, in particular in the oil sector. Given the above, the technical staff’s 2021 growth forecast has been revised upward from 4.6% in January (range from 2% to 6%) to 6.0% in April (range from 3% to 7%). These projections account for the potential for the third wave of COVID-19 to have a larger and more persistent effect on the economy than the previous wave, while also supposing that there will not be any additional significant waves of the pandemic and that mobility restrictions will be relaxed as a result. Economic growth in 2022 is expected to be 3%, with a range between 1% and 5%. This figure would be lower than projected in the January report (3.6% with a range between 2% and 6%), due to a higher base of comparison given the upward revision to expected GDP in 2021. This forecast also takes into account the likely effects on private demand of a fiscal adjustment of the size currently being proposed by the national government, and which would come into effect in 2022. Excess in productive capacity is now expected to be lower than estimated in January but continues to be significant and affected by high levels of uncertainty, as reflected in the wide forecast intervals. The possibility of new waves of the virus (of uncertain intensity and duration) represents a significant downward risk to projected GDP growth, and is signaled by the lower limits of the ranges provided in this report. Inflation (1.51%) and inflation excluding food and regulated items (0.94%) declined in March compared to December, continuing below the 3% target. The decline in inflation in this period was below projections, explained in large part by unanticipated increases in the costs of certain foods (3.92%) and regulated items (1.52%). An increase in international food and shipping prices, increased foreign demand for beef, and specific upward pressures on perishable food supplies appear to explain a lower-than-expected deceleration in the consumer price index (CPI) for foods. An unexpected increase in regulated items prices came amid unanticipated increases in international fuel prices, on some utilities rates, and for regulated education prices. The decline in annual inflation excluding food and regulated items between December and March was in line with projections from January, though this included downward pressure from a significant reduction in telecommunications rates due to the imminent entry of a new operator. When controlling for the effects of this relative price change, inflation excluding food and regulated items exceeds levels forecast in the previous report. Within this indicator of core inflation, the CPI for goods (1.05%) accelerated due to a reversion of the effects of the VAT-free day in November, which was largely accounted for in February, and possibly by the transmission of a recent depreciation of the peso on domestic prices for certain items (electric and household appliances). For their part, services prices decelerated and showed the lowest rate of annual growth (0.89%) among the large consumer baskets in the CPI. Within the services basket, the annual change in rental prices continued to decline, while those services that continue to experience the most significant restrictions on returning to normal operations (tourism, cinemas, nightlife, etc.) continued to register significant price declines. As previously mentioned, telephone rates also fell significantly due to increased competition in the market. Total inflation is expected to continue to be affected by ample excesses in productive capacity for the remainder of 2021 and 2022, though less so than projected in January. As a result, convergence to the inflation target is now expected to be somewhat faster than estimated in the previous report, assuming the absence of significant additional outbreaks of COVID-19. The technical staff’s year-end inflation projections for 2021 and 2022 have increased, suggesting figures around 3% due largely to variation in food and regulated items prices. The projection for inflation excluding food and regulated items also increased, but remains below 3%. Price relief measures on indirect taxes implemented in 2020 are expected to lapse in the second quarter of 2021, generating a one-off effect on prices and temporarily affecting inflation excluding food and regulated items. However, indexation to low levels of past inflation, weak demand, and ample excess productive capacity are expected to keep core inflation below the target, near 2.3% at the end of 2021 (previously 2.1%). The reversion in 2021 of the effects of some price relief measures on utility rates from 2020 should lead to an increase in the CPI for regulated items in the second half of this year. Annual price changes are now expected to be higher than estimated in the January report due to an increased expected path for fuel prices and unanticipated increases in regulated education prices. The projection for the CPI for foods has increased compared to the previous report, taking into account certain factors that were not anticipated in January (a less favorable agricultural cycle, increased pressure from international prices, and transport costs). Given the above, year-end annual inflation for 2021 and 2022 is now expected to be 3% and 2.8%, respectively, which would be above projections from January (2.3% and 2,7%). For its part, expected inflation based on analyst surveys suggests year-end inflation in 2021 and 2022 of 2.8% and 3.1%, respectively. There remains significant uncertainty surrounding the inflation forecasts included in this report due to several factors: 1) the evolution of the pandemic; 2) the difficulty in evaluating the size and persistence of excess productive capacity; 3) the timing and manner in which price relief measures will lapse; and 4) the future behavior of food prices. Projected 2021 growth in foreign demand (4.4% to 5.2%) and the supposed average oil price (USD 53 to USD 61 per Brent benchmark barrel) were both revised upward. An increase in long-term international interest rates has been reflected in a depreciation of the peso and could result in relatively tighter external financial conditions for emerging market economies, including Colombia. Average growth among Colombia’s trade partners was greater than expected in the fourth quarter of 2020. This, together with a sizable fiscal stimulus approved in the United States and the onset of a massive global vaccination campaign, largely explains the projected increase in foreign demand growth in 2021. The resilience of the goods market in the face of global crisis and an expected normalization in international trade are additional factors. These considerations and the expected continuation of a gradual reduction of mobility restrictions abroad suggest that Colombia’s trade partners could grow on average by 5.2% in 2021 and around 3.4% in 2022. The improved prospects for global economic growth have led to an increase in current and expected oil prices. Production interruptions due to a heavy winter, reduced inventories, and increased supply restrictions instituted by producing countries have also contributed to the increase. Meanwhile, market forecasts and recent Federal Reserve pronouncements suggest that the benchmark interest rate in the U.S. will remain stable for the next two years. Nevertheless, a significant increase in public spending in the country has fostered expectations for greater growth and inflation, as well as increased uncertainty over the moment in which a normalization of monetary policy might begin. This has been reflected in an increase in long-term interest rates. In this context, emerging market economies in the region, including Colombia, have registered increases in sovereign risk premiums and long-term domestic interest rates, and a depreciation of local currencies against the dollar. Recent outbreaks of COVID-19 in several of these economies; limits on vaccine supply and the slow pace of immunization campaigns in some countries; a significant increase in public debt; and tensions between the United States and China, among other factors, all add to a high level of uncertainty surrounding interest rate spreads, external financing conditions, and the future performance of risk premiums. The impact that this environment could have on the exchange rate and on domestic financing conditions represent risks to the macroeconomic and monetary policy forecasts. Domestic financial conditions continue to favor recovery in economic activity. The transmission of reductions to the policy interest rate on credit rates has been significant. The banking portfolio continues to recover amid circumstances that have affected both the supply and demand for loans, and in which some credit risks have materialized. Preferential and ordinary commercial interest rates have fallen to a similar degree as the benchmark interest rate. As is generally the case, this transmission has come at a slower pace for consumer credit rates, and has been further delayed in the case of mortgage rates. Commercial credit levels stabilized above pre-pandemic levels in March, following an increase resulting from significant liquidity requirements for businesses in the second quarter of 2020. The consumer credit portfolio continued to recover and has now surpassed February 2020 levels, though overall growth in the portfolio remains low. At the same time, portfolio projections and default indicators have increased, and credit establishment earnings have come down. Despite this, credit disbursements continue to recover and solvency indicators remain well above regulatory minimums. 1.2 Monetary policy decision In its meetings in March and April the BDBR left the benchmark interest rate unchanged at 1.75%.