Nonlinear Dynamics of Educational Determinants: A Panel Smooth Transition Approach

This study investigates how public expenditure on higher education shapes regional differences in tertiary education attainment, including advanced vocational training and university degrees (International Standard Classification of Education 5-8 in the Spanish System), across Spanish regions.Persistent heterogeneities in human capital formation suggest that conventional linear panel models may overlook important sources of variation.Research in the economics of education shows that the link between educational resources, such as public expenditure on higher education or scholarship funding, and achievement is context-dependent and may display heterogeneous, nonlinear responses.Figlio (Economics of Education Review, 1999) documented that school resources and teacher incentives vary in effectiveness across institutional environments, indicating that educational inputs do not exert uniform effects.Similarly, United States within-state evidence shows that spending yields context-specific and nonlinear impacts, such as diminishing returns to additional spending at higher funding levels (Jackson, National Bureau of Economic Research Working Paper, 2018, https:// www.nber.org/ papers/ w25368).These insights motivate an examination of whether key educational determinants change across segments defined by regional university spending.The empirical analysis relies on an annual regional panel dataset covering the 17 Spanish Autonomous Communities (regions) over 20 years (N = 340 region-year