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Educating Europe: Should Public Education be Financed with Graduate Taxes or Income-contingent Loans?

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  • Panu Poutvaara

Abstract

The mobility of labor reduces national incentives to invest in internationally applicable education. The European Union could overcome this by allowing member states to institute graduate taxes or income-contingent loans, collected also from migrants. Graduate taxes or income-contingent loans result in higher welfare than financing education with employment-based taxes. (JEL H24, H52, I28, F22)

Suggested Citation

  • Panu Poutvaara, 2004. "Educating Europe: Should Public Education be Financed with Graduate Taxes or Income-contingent Loans?," CESifo Economic Studies, CESifo Group, vol. 50(4), pages 663-684.
    • Handle: RePEc:oup:cesifo:v:50:y:2004:i:4:p:663-684.
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    File URL: http://hdl.handle.net/10.1093/cesifo/50.4.663
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    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

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