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Globalization and Human Capital Formation

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Author Info
Andersson, Fredrik
Konrad, Kai A

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Abstract

This Paper compares education investment in closed and open economies without government and with a benevolent government. Closed economies suffer from a hold-up problem of excessive redistribution, and governments use education policy as a second-best tool. Globalization that increases labour mobility reduces governments' incentives to provide subsidized education and increases private individuals' incentives for investment in their human capital. Globalization can improve welfare, and even restore full efficiency. Governments' scope for redistribution – which is a substitute for private income insurance – is reduced, and whether efficiency is restored depends on how private insurance markets react to the change in redistribution policy.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 2657.

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Date of creation: Jan 2001
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Handle: RePEc:cpr:ceprdp:2657

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Related research
Keywords: Commitment; Education Effort; Globalization; Migration; Time Consistent Income Taxation;

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Find related papers by JEL classification:
H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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. Epstein, Gil S. & Hillman, Arye L., 2000. "Social Harmony at the Boundaries of the Welfare State: Immigrants and Social Transfers," IZA Discussion Papers 168, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  2. Hamermesh, Daniel S., 2000. "Timing, Togetherness and Time Windfalls," IZA Discussion Papers 173, Institute for the Study of Labor (IZA).
    Other versions:
  3. Fertig, Michael & Schmidt, Christoph M., 2000. "Discretionary Measures of Active Labor Market Policy: The German Employment Promotion Reform in Perspective," IZA Discussion Papers 182, Institute for the Study of Labor (IZA). [Downloadable!]
  4. Kapteyn, A. & Kalwij, A. & Zaidi, A., 2000. "The myth of worksharing," Discussion Paper 23, Tilburg University, Center for Economic Research. [Downloadable!]
    Other versions:
  5. Dustmann, Christian & Windmeijer, Frank, 2000. "Wages and the Demand for Health - A Life Cycle Analysis," IZA Discussion Papers 171, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  6. Bauer, Thomas K. & Lofstrom, Magnus & Zimmermann, Klaus F., 2000. "Immigration Policy, Assimilation of Immigrants and Natives' Sentiments towards Immigrants: Evidence from 12 OECD-Countries," IZA Discussion Papers 187, Institute for the Study of Labor (IZA). [Downloadable!]
  7. MacDonald, Ziggy & Shields, Michael A., 2000. "The Impact of Alcohol Consumption on Occupational Attainment in England," IZA Discussion Papers 166, Institute for the Study of Labor (IZA). [Downloadable!]
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  8. Bauer, Thomas K. & Zimmermann, Klaus F., 2000. "Immigration Policy in Integrated National Economies," IZA Discussion Papers 170, Institute for the Study of Labor (IZA). [Downloadable!]
  9. Chiswick, Barry R. & Repetto, Gaston, 2000. "Immigrant Adjustment in Israel: Literacy and Fluency in Hebrew and Earnings," IZA Discussion Papers 177, Institute for the Study of Labor (IZA). [Downloadable!]
  10. Dustmann, Christian & Rochina-Barrachina, María Engracia, 2000. "Selection Correction in Panel Data Models: An Application to Labour Supply and Wages," IZA Discussion Papers 162, Institute for the Study of Labor (IZA). [Downloadable!]
  11. Christian Dustmann & Ian Preston, 2000. "Racial and Economic Factors in Attitudes to Immigration," Econometric Society World Congress 2000 Contributed Papers 0839, Econometric Society. [Downloadable!]
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  12. Wasmer, Etienne & Zenou, Yves, 2000. "Space, Search and Efficiency," IZA Discussion Papers 181, Institute for the Study of Labor (IZA). [Downloadable!]
  13. Bjorn, Gustafsson & Corak, Miles & Gustafsson, Bjorn & Österberg, Torun, 2001. "Intergenerational Influences on the Receipt of Unemployment Insurance in Canada and Sweden," Analytical Studies Branch Research Paper Series 2001159e, Statistics Canada, Analytical Studies Branch. [Downloadable!]
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  14. Bonin, Holger & Zimmermann, Klaus F., 2000. "The Post-Unification German Labor Market," IZA Discussion Papers 185, Institute for the Study of Labor (IZA). [Downloadable!]
  15. Shields, Michael A. & Wheatley Price, Stephen, 2000. "Racial Harassment, Job Satisfaction and Intentions to Quit: Evidence from the British Nursing Profession," IZA Discussion Papers 164, Institute for the Study of Labor (IZA). [Downloadable!]
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  16. Etienne Wasmer & Philippe Weil, 2004. "The Macroeconomics of Labor and Credit Market Imperfections," American Economic Review, American Economic Association, vol. 94(4), pages 944-963, September. [Downloadable!]
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  17. Ernst Fehr & Jean-Robert Tyran, 2001. "Does Money Illusion Matter?," American Economic Review, American Economic Association, vol. 91(5), pages 1239-1262, December. [Downloadable!] (restricted)
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  18. Barrett, Alan & FitzGerald, John & Nolan, Brian, 2002. "Earnings inequality, returns to education and immigration into Ireland," Labour Economics, Elsevier, vol. 9(5), pages 665-680, November. [Downloadable!] (restricted)
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  19. Bauer, Thomas K. & Gang, Ira N., 2000. "Sibling Rivalry in Educational Attainment: The German Case," IZA Discussion Papers 180, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  20. Fertig, Michael & Schmidt, Christoph M., 2000. "Aggregate-Level Migration Studies as a Tool for Forecasting Future Migration Streams," IZA Discussion Papers 183, Institute for the Study of Labor (IZA). [Downloadable!]
  21. Hart, Robert A. & Ma, Yue, 2000. "Why Do Firms Pay an Overtime Premium?," IZA Discussion Papers 163, Institute for the Study of Labor (IZA). [Downloadable!]
  22. Gimpelson, Vladimir & Treisman, Daniel & Monusova, Galina, 2000. "Public Employment and Redistributive Politics: Evidence from Russia’s Regions," IZA Discussion Papers 161, Institute for the Study of Labor (IZA). [Downloadable!]
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. Dan Anderberg & Carlo Perroni, . "Renegotiation of Social Contracts by Majority Rule," EPRU Working Paper Series 00-15, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics. [Downloadable!]
    Other versions:
  2. Alexander Kemnitz, 2008. "Native Welfare Losses from High Skilled Immigration," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  3. Oliver Busch, 2007. "When Have All the Graduates Gone?: Internal Cross-State Migration of Graduates in Germany 1984-2004," SOEPpapers 26, DIW Berlin, The German Socio-Economic Panel (SOEP). [Downloadable!]
  4. van Praag, Bernard M.S. & Ferrer-i-Carbonell, Ada, 2001. "Age-Differentiated QALY Losses," IZA Discussion Papers 314, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  5. Andersson, Fredrik & Konrad, Kai A., 2002. "Human Capital Investment and Globalization in Extortionary States," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  6. Alexander Haupt & Eckhard Janeba, 2004. "Education, Redistribution, and the Threat of Brain Drain," NBER Working Papers 10618, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  7. Alexander Haupt & Eckhard Janeba, 2003. "Bildung im Zeitalter mobilen Humankapitals," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 72(2), pages 173-187.
  8. Claudio Thum & Silke Uebelmesser, 2001. "Mobility and the Role of Education as a Commitment Device," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
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