Capitalist Systems, Deindustrialization, and the Politics of Public Education

Recent years have seen a number of studies on the determinants of educational spending. Almost all of the existing work emphasizes the importance of left-wing governments as a motor of expansion because such expansion allegedly ensures both redistribution and the facilitation of a supply-side economy. The existing literature thereby corroborates the power resource theory. Against this common wisdom the article presents an argument building on the varieties of capitalism approach. It is argued that education is a poor instrument for redistribution because access is universal and high-income groups have a tendency to use education even more than low-income groups. Instead, we argue that deindustrialization is the main driver of educational spending because deindustrialization constitutes one of the most salient threats to workers in modern societies. As deindustrialization rises workers risk ending up with redundant skills, especially in countries where the average skills specificity is high, that is, coordinated market economies. The expectations find empirical support in a time-series cross-section regression analysis of 18 Western countries in the years 1980-2000.