Expected Long-Term Budgetary Benefits

to Roma Education in Hungary

Roma Education FundMihai SurduBrussels, 30th November 2010

Gabor Kezdi and Gabor Kertesi- pioneering study in regard with economics of Roma inclusion in education

An invitation for the rationalization of public policies in several fields beyond education: social welfare, taxation, employment and health

Public and societal gains coming from investments in Roma inclusion.

Key message: money allocated for Roma inclusion, if allocated properly, are not a burden for the state budget but an investment on human resources which have it returns.

The importance of the study

One investment scenario is for the graduation of complete secondary school which give access to the college. Another is for graduating vocational training school.

Both scenarios are producing budgetary

benefits for the government although the benefits are higher in the scenario of secondary school track conducing to higher education.

Investments scenario

The benefits of the investments in Roma education: financial resources attracted to the national budget from increased contributions to the budget from Roma who are employed and the decreased transfers for different social welfare transfers from those Roma who are no more in need.

Seven channels for calculating the benefits: Personal income tax on income earned from registered full-time

employment Social security contributions paid by employers and employees on

earned income Unemployment benefits Means-tested welfare benefits Earning from public employment projects Value added and excise tax on consumption and Incarceration costs

Quantifying the benefits

Importance of the investment in education from an early age (from the age of four) which although make the investment more expensive it gives it better prospects and hence increase the likelihood and the quantity of latter benefits.

Due to labor market discrimination against Roma the returns from education are smaller in the case of Roma because the earnings of employed Roma are smaller than of non Roma for similar educational levels

“Estimated Roma benefits are smaller than estimated national benefits because for the same educational level (and age), the Roma have lower employment chances and if employed, lower expected earnings.”

Early age investment and labor discrimination

Thank you!Link to the

study:http://www.romaeducationfund.hu/documents/Kertesi-Kezdi-BudgetaryBenefits.pdf

My e-mail: msurdu@romaeducationfund.org