Economics of Transition
Recent studies suggest that the allocation of expenditures in education is important for growth. The state of public education spending in many transition economies highlights the need for an assessment of the nature of education expenditures in these countries. This paper attempts to fill this gap in the literature by estimating the determinants of education expenditures in the Russian Federation. Results from panel data analysis show that revenue and the student-population ratio have a positive impact on education expenditures while the effect of population density is negative. Three regional variables also show significant impact. The income and price elasticity of public education expenditures are estimated to be 0.57 and -0.18, respectively, a result comparable to studies from other countries. The results presented here provide insight into how fiscal institutions and the structure of the political process in Russia may affect the degree of resource allocation in the educational sector during the transition process.