Trade and Divergence in Education Systems
AbstractThis paper presents a theory on the endogenous choice of a country's education policy and the two-way causal relationship between trade and education systems. The setting of a country's education system determines its talent distribution and comparative advantage in trade; the possibility of trade by raising the returns to the sector of comparative advantage in turn induces countries to further differentiate their education systems and reinforces the initial pattern of comparative advantage. Specifically, the Nash equilibrium choice of education systems by two countries interacting strategically are necessarily more divergent than their autarky choices, although the difference is still less than what is socially optimal for the world. We provide some preliminary empirical evidence on the relationship between education system and talent distribution.
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Bibliographic InfoPaper provided by Singapore Management University, School of Economics in its series Working Papers with number 32-2012.
Length: 51 pages
Date of creation: Sep 2012
Date of revision:
Publication status: Published in SMU Economics and Statistics Working Paper Series
Other versions of this item:
- Fali HUANG & Pao-Li CHANG, 2012. "Trade and Divergence in Education Systems," DEGIT Conference Papers c017_016, DEGIT, Dynamics, Economic Growth, and International Trade.
- Pao-Li Chang & Fali Huang, 2010. "Trade and Divergence in Education Systems," Working Papers 33-2010, Singapore Management University, School of Economics.
- F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
- I20 - Health, Education, and Welfare - - Education - - - General
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-11-11 (All new papers)
- NEP-INT-2012-11-11 (International Trade)
- NEP-LAB-2012-11-11 (Labour Economics)
- NEP-SEA-2012-11-11 (South East Asia)
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