This article discusses how fiscal policy, through the spending on education, affects the accumulation of capabilities and the levels of productivity. It is suggested the possibility that public spending may contribute to productivity increases, therefore having an effect that goes beyond its direct effect on effective demand. The effect on productivity comes from the investment of a share of total public spending in education and the training of workers. As a result, public spending gives rise to changes in employment levels, wages, productivity and growth, whose policy implications are analyzed.
Fiscal policy; Productivity; Human capital; Education; Growth
