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Mobility and the Role of Education as a Commitment Device

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  • Claudio Thum
  • Silke Übelmesser

Abstract

European integration forces system competition within European countries. This competition has important implications for both the public pay-as-you-go pension scheme and the public education system. Without labor mobility, each generation has an incentive to invest in the human capital of the subsequent generation in order to maximize pension payments. It is a popular belief that increasing labor mobility decreases the incentives to finance the education of the subsequent generation. This paper shows that this is not true if human capital investment increases the mobility of the subsequent generation and can thus be used as a commitment device for low taxes.

Suggested Citation

  • Claudio Thum & Silke Übelmesser, 2001. "Mobility and the Role of Education as a Commitment Device," CESifo Working Paper Series 450, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_450
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    References listed on IDEAS

    as
    1. Boadway, Robin & Marceau, Nicolas & Marchand, Maurice, 1996. "Investment in Education and the Time Inconsistency of Redistributive Tax Policy," Economica, London School of Economics and Political Science, vol. 63(250), pages 171-189, May.
    2. Gradstein, Mark, 2000. "An economic rationale for public education: The value of commitment," Journal of Monetary Economics, Elsevier, vol. 45(2), pages 463-474, April.
    3. Sinn, Hans-Werner, 1997. "The selection principle and market failure in systems competition," Journal of Public Economics, Elsevier, vol. 66(2), pages 247-274, November.
    4. Andersson, Fredrik & Konrad, Kai A., 2001. "Globalization and Human Capital Formation," IZA Discussion Papers 245, Institute for the Study of Labor (IZA).
    5. Patrick J. Kehoe, 1989. "Policy Cooperation Among Benevolent Governments May Be Undesirable," Review of Economic Studies, Oxford University Press, vol. 56(2), pages 289-296.
    6. Mark Gradstein & Moshe Justman, 1996. "The political economy of mixed public and private schooling: A dynamic analysis," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 3(3), pages 297-310, July.
    7. Konrad, Kai A, 1995. "Social Security and Strategic Inter-vivos Transfers of Social Capital," Journal of Population Economics, Springer;European Society for Population Economics, vol. 8(3), pages 315-326, August.
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    Citations

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    Cited by:

    1. Poutvaara, Panu, 2011. "The expansion of higher education and time-consistent taxation," European Journal of Political Economy, Elsevier, vol. 27(2), pages 257-267, June.
    2. Gabrielle Demange & Robert Fenge & Silke Uebelmesser, 2014. "Financing Higher Education in a Mobile World," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 16(3), pages 343-371, June.
    3. Panu Poutvaara, 2004. "Public Education in an Integrated Europe: Studying for Migration and Teaching for Staying?," Public Economics 0406006, EconWPA.
    4. Panu Poutvaara, 2008. "Public and Private Education in an Integrated Europe: Studying to Migrate and Teaching to Stay?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 110(3), pages 591-608, September.
    5. Wildasin, David, 2014. "Human Capital Mobility: Implications for Efficiency, Income Distribution, and Policy," IZA Discussion Papers 8199, Institute for the Study of Labor (IZA).
    6. repec:oup:cesifo:v:54:y:2008:i:2:p:248-276. is not listed on IDEAS
    7. Gabrielle Demange & Robert Fenge & Silke Uebelmesser, 2008. "The Provision of Higher Education in a Global World—Analysis and Policy Implications," CESifo Economic Studies, CESifo, vol. 54(2), pages 248-276.
    8. Nikos Benos, 2004. "Education Policies and Economic Growth," University of Cyprus Working Papers in Economics 4-2004, University of Cyprus Department of Economics.
    9. Andersson, Fredrik & Konrad, Kai A., 2002. "Taxation and education investment in the tertiary sector
      [Besteuerung und Bildungsinvestitionen im tertiären Sektor]
      ," Discussion Papers, Research Unit: Market Processes and Governance FS IV 02-17, Social Science Research Center Berlin (WZB).
    10. Alexander Haupt & Silke Übelmesser, 2009. "Voting on Labour-Market Integration and Education Policy when Citizens Differ in Mobility and Ability," CESifo Working Paper Series 2588, CESifo Group Munich.
    11. Panu Poutvaara, 2004. "Public Education in an Integrated Europe: Studying to Migrate and Teaching to Stay?," CESifo Working Paper Series 1369, CESifo Group Munich.
    12. Silke Uebelmesser, 2004. "Harmonisation of Old-age Security Within the European Union," CESifo Economic Studies, CESifo, vol. 50(4), pages 717-743.
    13. Nikos Benos, 2005. "Education Systems, Growth and Welfare," University of Cyprus Working Papers in Economics 5-2005, University of Cyprus Department of Economics.
    14. Silke Uebelmesser & Marcel Gérard, 2014. "Financing Higher Education when Students and Graduates are Internationally Mobile," Jena Economic Research Papers 2014-009, Friedrich-Schiller-University Jena.
    15. Panu Poutvaara, 2003. "Educating Europe," Public Economics 0302008, EconWPA.
    16. Gabrielle Demange & Robert Fenge & Silke Übelmesser, 2008. "Financing Higher Education and Labor Mobility," CESifo Working Paper Series 2362, CESifo Group Munich.
    17. David Wildasin, 2008. "Public Finance in an Era of Global Demographic Change: Fertility Busts, Migration Booms, and Public Policy," Working Papers 2008-02, University of Kentucky, Institute for Federalism and Intergovernmental Relations.
    18. Alexander Haupt & Eckhard Janeba, 2009. "Education, redistribution and the threat of brain drain," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 16(1), pages 1-24, February.

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