Local Public Funding of Higher Education when Students and Skilled Workers are Mobile
AbstractThe interregional mobility of high skilled workers might induce an underinvestment in local public higher education when sub-federal entities independently decide on education expenditures to maximize local output. This well-known result is due to interregional spillovers and provides a justification for coordinated education policy or rather a federal intervention. However, things might change completely when taking into account the interregional mobility of students. Now, local education expenditures not only affect labor migration (through wage differentials) but also student migration flows. The model in this paper then shows that local output maximization does not necessarily imply underprovision of higher education, since regions now have an incentive to attract students as future human capital. The stay rates of graduates in equilibrium and the sensitivity of wages to migration are key determinants of local policy. Furthermore, results depend on local government objectives or rather the weighting of natives relative to foreigners. Therefore, the paper also considers natives’ preferred local policy.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University of Paderborn, CIE Center for International Economics in its series Working Papers with number 11.
Length: 30 pages
Date of creation: May 2008
Date of revision:
Contact details of provider:
Postal: Warburger Str. 100, 33098 Paderborn
Web page: http://www.uni-paderborn.de/fakultaeten/wiwi/department4/cie/
More information through EDIRC
higher education; student mobility; labor mobility; local public finance;
Find related papers by JEL classification:
- I22 - Health, Education, and Welfare - - Education - - - Educational Finance
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers
- H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-06-07 (All new papers)
- NEP-EDU-2008-06-07 (Education)
- NEP-GEO-2008-06-07 (Economic Geography)
- NEP-HRM-2008-06-07 (Human Capital & Human Resource Management)
- NEP-LAB-2008-06-07 (Labour Economics)
- NEP-MIG-2008-06-07 (Economics of Human Migration)
- NEP-URE-2008-06-07 (Urban & Real Estate 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.:
- Fredrik Andersson & Kai A. Konrad, 2002.
"Human Capital Investment and Globalization in Extortionary States,"
CESifo Working Paper Series
703, CESifo Group Munich.
- Andersson, Fredrik & Konrad, Kai A., 2003. "Human capital investment and globalization in extortionary states," Journal of Public Economics, Elsevier, vol. 87(7-8), pages 1539-1555, August.
- Andersson, Fredrik & Konrad, Kai A., 2001. "Human Capital Investment and Globalization in Extortionary States," IZA Discussion Papers 239, Institute for the Study of Labor (IZA).
- Andersson, Fredrik & Konrad, Kai A., 2002. "Human capital investment and globalization in extortionary states," Discussion Papers, Research Unit: Market Processes and Governance FS IV 02-01, Social Science Research Center Berlin (WZB).
- Baruch, Yehuda & Budhwar, Pawan S. & Khatri, Naresh, 2007. "Brain drain: Inclination to stay abroad after studies," Journal of World Business, Elsevier, vol. 42(1), pages 99-112, March.
- Robin Boadway & Nicolas Marceau & Maurice Marchand, 1996.
"Issues in decentralizing the provision of education,"
International Tax and Public Finance,
Springer, vol. 3(3), pages 311-327, July.
- BOADWAY, Robin & MARCEAU, Nicolas & MARCHAND, Maurice, 1995. "Issues in Decentralizing the Provision of Education," Cahiers de recherche 9528, Université Laval - Département d'économique.
- Boadway, R. & Marceau, N. & Marchand, M., 1995. "Issues in Decentralizing the Provision of Education," Papers 9528, Laval - Recherche en Politique Economique.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (FB5-Info).
If references are entirely missing, you can add them using this form.