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Lobbying for Education in a Two-sector Model

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  • Debora Di Gioacchino
  • Paola Profeta

Abstract

In a two-period model, firms specialized in two different sectors lobby to induce the government to subsidize the type of education complementary to their production. Lobbying is endogenous. We show that, if lobbying is not costly, both sectors will lobby in equilibrium and education policy will induce the same skill composition that would be chosen by the social planner. However, if lobbying is costly, only one sector finds it profitable to offer monetary contribution and direct resources towards the type of education required by its production. Which sector will engage in lobbying depends on relative size, productivity and price in the two sectors.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3446.

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Date of creation: 2011
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Handle: RePEc:ces:ceswps:_3446

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  1. Leonardo Felli & Antonio Merlo, 2006. "Endogenous Lobbying," Journal of the European Economic Association, MIT Press, MIT Press, vol. 4(1), pages 180-215, 03.
  2. Richard E. Baldwin & Frédéric Robert-Nicoud, 2007. "Entry and asymmetric lobbying: why governments pick losers," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 19726, London School of Economics and Political Science, LSE Library.
  3. Grossman, G.M. & Helpman, E., 1992. "Protection for Sale," Papers, Tel Aviv 21-92, Tel Aviv.
  4. Gene Grossman & Elhanan Helpman, 1994. "Electoral Competition and Special Interest Politics," NBER Working Papers 4877, National Bureau of Economic Research, Inc.
  5. Vandenbussche, Jérôme & Aghion, Philippe & Meghir, Costas, 2006. "Growth, distance to frontier and composition of human capital," Scholarly Articles 12490648, Harvard University Department of Economics.
  6. Oded Galor & Omer Moav, 2006. "Das Human-Kapital: A Theory of the Demise of the Class Structure," Review of Economic Studies, Oxford University Press, vol. 73(1), pages 85-117.
  7. Oded Galor & Omer Moav, 2000. "Das Human Kapital," Working Papers 2000-17, Brown University, Department of Economics.
  8. Daron Acemoglu, 2000. "Technical Change, Inequality, and the Labor Market," NBER Working Papers 7800, National Bureau of Economic Research, Inc.
  9. Murphy, Kevin M & Shleifer, Andrei & Vishny, Robert W, 1991. "The Allocation of Talent: Implications for Growth," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 106(2), pages 503-30, May.
  10. Jérôme Vandenbussche & Philippe Aghion & Costas Meghir, 2006. "Growth, distance to frontier and composition of human capital," Journal of Economic Growth, Springer, Springer, vol. 11(2), pages 97-127, June.
  11. Graziella Bertocchi and Michael Spagat, 2001. "The Evolution of Modern Educational Systems," Royal Holloway, University of London: Discussion Papers in Economics, Department of Economics, Royal Holloway University of London 01/4, Department of Economics, Royal Holloway University of London, revised Sep 2001.
  12. Alstadsæter, Annette & Kolm, Anne-Sofie & Larsen, Birthe, 2005. "Money or Joy," Working Papers, Copenhagen Business School, Department of Economics 23-2005, Copenhagen Business School, Department of Economics.
  13. repec:ags:afjare:141665 is not listed on IDEAS
  14. Di Gioacchino, Debora & Sabani, Laura, 2009. "Education policy and inequality: A political economy approach," European Journal of Political Economy, Elsevier, Elsevier, vol. 25(4), pages 463-478, December.
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