Government Spending on Education and Labour Mobility
This paper sets up a simple two-country overlapping generations madel to explore the interplay between education, taxation, and labour mobility and to assess the impact of education policies on human capital formation and long-run welfare in both the sending and the receiving country. It emphasises the role of diminishing returns with respect to public spending on education in the welfare consequences of labour mobility. Emigration can improve the long-run welfare of the sending country when the elasticity of the education technology is low. Immigration augments the long-run level of human capital in the receiving country but can resuit in a level of long-run welfare lower than autarky.
|Date of creation:||01 Dec 2000|
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RCER Working Papers
130, University of Rochester - Center for Economic Research (RCER).
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- George Psacharopoulos, 1985. "Returns to Education: A Further International Update and Implications," Journal of Human Resources, University of Wisconsin Press, vol. 20(4), pages 583-604.
- Glomm, Gerhard & Ravikumar, B, 1992. "Public versus Private Investment in Human Capital Endogenous Growth and Income Inequality," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 818-34, August.
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