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Education Policy and Mobility: Some Basic Results

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  • Ulrich Hange

Abstract

This paper analyzes regional public education policy in the presence of mobile workers. Labor market integration leads to fiscal competition, shifting the whole burden of taxation to immobile workers. In the case of mobile skilled workers, this results in income inequalities and inefficient low investment in human capital. This is even more pronounced if politicians are partly self-interested. In contrast, if unskilled workers are mobile, all households receive the same net earnings. In this scenario, a benevolent government ensures an efficient level of human capital investment, while partly selfish politicians choose to invest too little in education.

Suggested Citation

  • Ulrich Hange, 2003. "Education Policy and Mobility: Some Basic Results," CESifo Working Paper Series 937, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_937
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    File URL: http://www.cesifo-group.de/DocDL/cesifo_wp937.pdf
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    References listed on IDEAS

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    1. Clemens Fuest & Bernd Huber, 1999. "Tax Coordination and Unemployment," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 6(1), pages 7-26, February.
    2. Wolfram Richter & Kerstin Schneider, 2001. "Taxing Mobile Capital with Labor Market Imperfections," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 8(3), pages 245-262, May.
    3. Wellisch, Dietmar & Wildasin, David E., 1996. "Decentralized income redistribution and immigration," European Economic Review, Elsevier, vol. 40(1), pages 187-217, January.
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    Keywords

    education policy; factor mobility;

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