MINELRES: Study: Expected Long-term Budgetary Benefits to Roma Education in Hungary

[minelres@lists.microlink.lv]

Original sender: Alexandre Mark <info@romaeducationfund.org>


"Expected Long-term Budgetary Benefits to Roma Education in Hungary" 
Gabor Kertesi and D Gabor Kezdi,
REF Working Paper, Budapest, 
November 2006

A new Roma Education Fund flagship study on the benefits of investing in
Roma education in Hungary has been released in Budapest.  During the
press conference Rumyan Russinov, Deputy Director of REF, said "it is
time that European understand that improving education of Roma is not
only an issue for Roma parents and that many formal and informal 
barriers need to be removed. This requires real commitment and
investments on the part of Governments and  this study proves that these
investments can actually bring high returns to Governments". Alexandre
Marc, REF director mentioned that REF was committed to support more of
such analysis that show that improving Roma education outcome is not
only important from a human right perspective but makes very good
economic sense, this is the argument that Minister of Finance should
understand.

The education deficit of the Roma population has been well documented in
all countries participating in the Decade of Roma Inclusion.  This
legacy of past exclusionary policies not only contributes to continuing
social exclusion, it precludes equal participation of Roma in the labor
market and thereby perpetuates welfare dependency and dramatically
reduces future tax revenues. The Roma Education Fund Study conducted by
Gabor Kertesi and Gabor Kezdi [1] using Hungarian data illustrates just
how much governments could gain in future budgetary revenues by
investing now in measures that would bring Roma education outcomes on
par with the non-Roma population.  The researchers show that the deficit
in Roma education outcomes in Hungary is associated with substantially
lower employment earnings and consequently lower lifetime contributions
to PIT, social contributions and VAT.  By quantifying these potential
additional revenue streams on a net basis (allowing for additional
education costs incurred following the initial investment) and applying
an appropriate discount rate, the researchers show that the present
value of investments in Roma education ranges from 30.000 to 70.000 Euro
per student.  This measure is based solely on increased budgetary
revenues and does not include the additional after tax income benefit to
the Roma themselves and their families.  Because the necessary data to
perform such calculations is very scarce, the authors perform numerous
sensitivity tests on their results which confirm the robustness of the
findings.  Indeed due to the likelihood of significant wage growth over
time, the results are most likely an underestimate of the true fiscal
benefits. 

The study is available on www.romaeducationfund.org

[1] Institute of Economics, Hungarian Academy of Sciences and Central
European University/ Institute of Economics, Hungarian Academy of
Sciences respectively.

---------------
Alexandre Marc
Director
Roma Education Fund 
H- 1056 Budapest Vaci u. 63
Tel: 36-1-235-80 38
www.romaeducationfund.org

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