Social status, compulsory education, and growth

In the long run, if agents pay more attention to social status, the time allocated to higher education and economic growth both increase. However, if the education provided by the government is less efficient than that provided by the private sector, a longer period of compulsory education not only decreases the time allocated to higher education, but also reduces the total time spent in education. Therefore, economic growth declines because of the greater amount of inefficient education provided by the government.