In this paper we show that an increase in the ratio of educational sub
sidies to income financed by flat-rate consumption and income taxes en
hances economic growth, and has no net effect on fertility with logari
thmic preferences. Using data from 69 countries, a cross-section analy
sis indicates that these theoretical results are consistent with empir
ical evidence. (C) 1998 Elsevier Science S.A. All rights reserved.