Who pays for job training?
AbstractAn optimal education subsidy formula is derived using an overlapping generations model with parental altruism. The model predicts that public education subsidy is greater in economies with lesser parental altruism because a benevolent government has to compensate for the shortfall in private education spending of less altruistic parents with a finite life. On the other hand, growth is higher in economies with greater parental altruism. Cross-country regressions using the World Values Survey for altruism lend support to our model predictions. The model provides insights about the reasons for higher education subsidy in richer countries.
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Bibliographic InfoPaper provided by Durham University Business School in its series Working Papers with number 2011_08.
Date of creation: 16 Feb 2011
Date of revision:
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-09-22 (All new papers)
- NEP-DGE-2011-09-22 (Dynamic General Equilibrium)
- NEP-EDU-2011-09-22 (Education)
- NEP-HRM-2011-09-22 (Human Capital & Human Resource Management)
- NEP-LAB-2011-09-22 (Labour Economics)
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.:
- Nickell, Stephen & Bell, Brian, 1995. "The Collapse in Demand for the Unskilled and Unemployment across the OECD," Oxford Review of Economic Policy, Oxford University Press, vol. 11(1), pages 40-62, Spring.
- Stevens, Margaret, 1994. "A Theoretical Model of On-the-Job Training with Imperfect Competition," Oxford Economic Papers, Oxford University Press, vol. 46(4), pages 537-62, October.
- Haskel, Jonathan & Martin, Christopher, 2001. "Technology, Wages, and Skill Shortages: Evidence from UK Micro Data," Oxford Economic Papers, Oxford University Press, vol. 53(4), pages 642-58, October.
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