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Local public funding of higher education when skilled labor is imperfectly mobile

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  • JUSTMAN , Moshe
  • THISSE, Jacques-François

Abstract

If higher education is publicly funded by local (sub-federal) jurisdictions, while skilled labor is heterogeneous in responding to wage differentials between jurisdictions, the spillovers that result give rise to a disparity between the centralized output-maximizing allocation of resources to higher education and decentralized equilibria. Generally, decentralization leads to under-provision, which can be offset by inter-jurisdictional subsidies based on gross migration flows. But the extent of the discrepancy depends on the local balance of political forces. Indeed, when the welfare of native-born emigrants is highly valued while new immigrants carry little political weight, over-provision in equilibrium is possible. Copyright Kluwer Academic Publishers 2000
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  • JUSTMAN , Moshe & THISSE, Jacques-François, 2000. "Local public funding of higher education when skilled labor is imperfectly mobile," LIDAM Reprints CORE 1460, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvrp:1460
    DOI: 10.1023/A:1008705528650
    Note: In : International Tax and Public Finance, 7, 247-258, 2000
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    2. repec:adr:anecst:y:1997:i:45:p:13 is not listed on IDEAS
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