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Educating Europe

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Author Info
Poutvaara, Panu

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Abstract

The mobility of labor reduces national incentives to invest in internationally applicable education. The European Union could overcome this by allowing member states to institute graduate taxes or income-contingent loans, collected also from migrants. This paper presents calculations on how a graduate tax system could look for Finland. To protect citizens against Leviathan governments, graduate taxes or income-contingent loans could be based on voluntary contracts. Education would then be financed publicly only for those accepting also to share the returns. With EU enlargement, such reforms could generate a triple dividend.

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Paper provided by CESifo GmbH in its series CESifo Working Paper Series with number CESifo Working Paper No. 1114.

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Date of creation: 2004
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Handle: RePEc:ces:ceswps:_1114

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Keywords: graduate taxes European Union individual accounts income-contingent loans migration

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This paper has been announced in the following NEP Reports: References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Poutvaara, Panu, 2001. "Alternative tax constitutions and risky education in a federation," Regional Science and Urban Economics, Elsevier, vol. 31(2-3), pages 355-377, April. [Downloadable!] (restricted)
  2. Richter, Wolfram F., 2002. "Social Security and Taxation of Labour Subject to Subsidiarity and Freedom of Movement," IZA Discussion Papers 490, Institute for the Study of Labor (IZA). [Downloadable!]
  3. Claudio Thum & Silke Uebelmesser, 2003. "Mobility and the Role of Education as a Commitment Device," Asia-Pacific Financial Markets, Springer, vol. 10(5), pages 549-564, September. [Downloadable!] (restricted)
    Other versions:
  4. Keen, M. & Marchand, M., 1996. "Fiscal Competition and the Pattern of Public Spending," Papers 9601, Catholique de Louvain - Center for Operations Research and Economics.
    Other versions:
  5. Barr, Nicholas, 1993. "Alternative Funding Resources for Higher Education," Economic Journal, Royal Economic Society, vol. 103(418), pages 718-28, May. [Downloadable!] (restricted)
  6. Garcia-Penalosa, Cecilia & Walde, Klaus, 2000. "Efficiency and Equity Effects of Subsidies to Higher Education," Oxford Economic Papers, Oxford University Press, vol. 52(4), pages 702-22, October.
  7. Stark, Oded & Wang, Yong, 2002. "Inducing human capital formation: migration as a substitute for subsidies," Journal of Public Economics, Elsevier, vol. 86(1), pages 29-46, October. [Downloadable!] (restricted)
  8. Hans-Werner Sinn, 2004. "EU Enlargement, Migration and the New Constitution," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
  9. Chapman, Bruce, 1997. "Conceptual Issues and the Australian Experience with Income Contingent Charges for Higher Education," Economic Journal, Royal Economic Society, vol. 107(442), pages 738-51, May. [Downloadable!] (restricted)
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  10. Chau, Nancy H & Stark, Oded, 1999. "Migration under Asymmetric Information and Human Capital Formation," Review of International Economics, Blackwell Publishing, vol. 7(3), pages 455-83, August.
  11. Panu Poutvaara & Vesa Kanniainen, 2000. "Why Invest in Your Neighbor? Social Contract on Educational Investment," International Tax and Public Finance, Springer, vol. 7(4), pages 547-562, August. [Downloadable!] (restricted)
  12. Sinn, Hans-Werner, 1993. "How Much Europe? Subsidiarity, Centralization and Fiscal Competition," CEPR Discussion Papers 834, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  13. Nerlove, Marc L, 1975. "Some Problems in the Use of Income-contingent Loans for the Finance of Higher Education," Journal of Political Economy, University of Chicago Press, vol. 83(1), pages 157-83, February. [Downloadable!] (restricted)
  14. George J. Borjas, 1994. "The Economics of Immigration," Journal of Economic Literature, American Economic Association, vol. 32(4), pages 1667-1717, December. [Downloadable!] (restricted)
  15. Sinn, Hans-Werner, 1995. " A Theory of the Welfare State," Scandinavian Journal of Economics, Blackwell Publishing, vol. 97(4), pages 495-526, December.
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  16. Sinn, Hans-Werner, 1997. "The selection principle and market failure in systems competition," Journal of Public Economics, Elsevier, vol. 66(2), pages 247-274, November. [Downloadable!] (restricted)
  17. Elena Del Rey, 2001. "Economic Integration and Public Provision of Education," Empirica, Springer, vol. 28(2), pages 203-218, June. [Downloadable!] (restricted)
  18. Kehoe, Patrick J, 1989. "Policy Cooperation among Benevolent Governments May Be Undesirable," Review of Economic Studies, Blackwell Publishing, vol. 56(2), pages 289-96, April. [Downloadable!] (restricted)
  19. Panu Poutvaara, 2000. "Education, Mobility of Labour and Tax Competition," International Tax and Public Finance, Springer, vol. 7(6), pages 699-719, December. [Downloadable!] (restricted)
  20. Borjas, George J, 1987. "Self-Selection and the Earnings of Immigrants," American Economic Review, American Economic Association, vol. 77(4), pages 531-53, September. [Downloadable!] (restricted)
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  21. David E. Wildasin, 2000. "Labor-Market Integration, Investment in Risky Human Capital, and Fiscal Competition," American Economic Review, American Economic Association, vol. 90(1), pages 73-95, March. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Salvatore Barbaro, 2004. "Tax Distortion, Countervailing Subsidies and Income Redistribution," Departmental Discussion Papers 121, University of Goettingen, Department of Economics. [Downloadable!]
  2. Schwager, Robert, 2007. "Public Universities, Tuition and Competition: A Tiebout Model," ZEW Discussion Papers 07-056, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  3. Alexander Kemnitz, . "Educational Federalism and the Quality Effects of Tuition Fees," IVS discussion paper series 617, Institut für Volkswirtschaft und Statistik (IVS), University of Mannheim. [Downloadable!]
  4. Panu Poutvaara, 2004. "Public Education in an Integrated Europe: Studying to Migrate and Teaching to Stay?," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
    Other versions:
  5. Panu Poutvaara, 2004. "Public Education in an Integrated Europe: Studying for Migration and Teaching for Staying?," Public Economics 0406006, EconWPA. [Downloadable!]
  6. Panu Poutvaara, 2007. "The Expansion of Higher Education and Time-Consistent Taxation," IZA Discussion Papers 3023, Institute for the Study of Labor (IZA). [Downloadable!]
  7. Hartmut Egger & Josef Falkinger & Volker Grossmann, 2007. "Brain Drain, Fiscal Competition, and Public Education Expenditure," IZA Discussion Papers 2747, Institute for the Study of Labor (IZA). [Downloadable!]
  8. Lydia Mechtenberg & Roland Strausz, . "The Bologna Process: How student mobility affects multi-cultural skills and educational quality," Papers 030, Departmental Working Papers. [Downloadable!]
    Other versions:
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