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Local public funding of higher education when skilled labor is imperfectly mobile

  • JUSTMAN , Moshe
  • THISSE, Jacques-François

If higher education is publicly funded by local (sub-federal) jurisdictions, while skilled labor is heterogeneous in responding to wage differentials between jurisdictions, the spillovers that result give rise to a disparity between the centralized output-maximizing allocation of resources to higher education and decentralized equilibria. Generally, decentralization leads to under-provision, which can be offset by inter-jurisdictional subsidies based on gross migration flows. But the extent of the discrepancy depends on the local balance of political forces. Indeed, when the welfare of native-born emigrants is highly valued while new immigrants carry little political weight, over-provision in equilibrium is possible. Copyright Kluwer Academic Publishers 2000

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File URL: http://dx.doi.org/10.1023/A:1008705528650
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Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers RP with number -1460.

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Handle: RePEc:cor:louvrp:-1460
Note: In : International Tax and Public Finance, 7, 247-258, 2000
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  1. Caroline Minter Hoxby, 1996. "Are Efficiency and Equity in School Finance Substitutes or Complements?," Journal of Economic Perspectives, American Economic Association, vol. 10(4), pages 51-72, Fall.
  2. Cremer, H. & Pestieau, P., . "Distributive implications of European integration," CORE Discussion Papers RP -1237, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  3. Barbara J. Spencer & James A. Brander, 1982. "International R&D Rivalry and Industrial Strategy," Working Papers 518, Queen's University, Department of Economics.
  4. Shields, Gail M & Shields, Michael P, 1989. " The Emergence of Migration Theory and a Suggested New Direction," Journal of Economic Surveys, Wiley Blackwell, vol. 3(4), pages 277-304.
  5. CREMER, Helmuth & FOURGEAUD, Virginie & LEITE-MONTEIRO, Manuel & MARCHAND, Maurice, . "Mobility and redistribution: A survey," CORE Discussion Papers RP -1371, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  6. Mark Gradstein & Moshe Justman, 1996. "The political economy of mixed public and private schooling: A dynamic analysis," International Tax and Public Finance, Springer, vol. 3(3), pages 297-310, July.
  7. Gradstein, Mark & Justman, Moshe, 1995. "Competitive investment in higher education: The need for policy coordination," Economics Letters, Elsevier, vol. 47(3-4), pages 393-400, March.
  8. David E. WILDASIN, 1997. "Income Distribution and Redistribution Within Federations," Annales d'Economie et de Statistique, ENSAE, issue 45, pages 291-313.
  9. Mansoorian, Arman & Myers, Gordon M., 1997. "On the consequences of government objectives for economies with mobile populations," Journal of Public Economics, Elsevier, vol. 63(2), pages 265-281, January.
  10. Devereux, Michael B & Mansoorian, Arman, 1992. "International Fiscal Policy Coordination and Economic Growth," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 33(2), pages 249-68, May.
  11. Wildasin, David E, 1991. "Income Redistribution in a Common Labor Market," American Economic Review, American Economic Association, vol. 81(4), pages 757-74, September.
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