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On human capital formation with exit options: Comment and new results

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  • Poutvaara, Panu

Abstract

Katz and Rapoport (2005) conclude that with linear production technology and the possibility of unilateral migration, region-specific shocks may increase the average level of education. Previously, Poutvaara (2000) derived a corresponding result with Cobb-Douglas technology and migration which may go in both directions. This paper extends the analysis to all strictly concave production functions, and shows how the effect of the region-specific shocks depends on the shape of the production function. Also, the paper establishes when the presence of exit option increases and when it reduces investment in education. The results are robust to allowing for migration costs.

Suggested Citation

  • Poutvaara, Panu, 2008. "On human capital formation with exit options: Comment and new results," Munich Reprints in Economics 19803, University of Munich, Department of Economics.
    • Handle: RePEc:lmu:muenar:19803
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    References listed on IDEAS

    as
    1. Panu Poutvaara, 2000. "Education, Mobility of Labour and Tax Competition," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 7(6), pages 699-719, December.
    2. Eliakim Katz & Hillel Rapoport, 2005. "On human capital formation with exit options," Journal of Population Economics, Springer;European Society for Population Economics, vol. 18(2), pages 267-274, June.
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    Cited by:

    1. Kancs, D’Artis & Kielyte, Julda, 2010. "Education in the East, Emigrating to the West?," European Review, Cambridge University Press, vol. 18(2), pages 133-154, May.
    2. Baran Siyahhan & Hamed Ghoddusi, 2022. "Optimal investment in human capital under migration uncertainty," Review of International Economics, Wiley Blackwell, vol. 30(2), pages 422-449, May.
    3. Heijdra, Ben J. & Ligthart, Jenny E., 2010. "The Transitional Dynamics Of Fiscal Policy In Small Open Economies," Macroeconomic Dynamics, Cambridge University Press, vol. 14(1), pages 1-28, February.
    4. repec:dau:papers:123456789/179 is not listed on IDEAS
    5. Chand, Satish & Clemens, Michael A., 2023. "Human capital investment under exit options: Evidence from a natural quasi-experiment," Journal of Development Economics, Elsevier, vol. 163(C).
    6. Meir Russ & Bino Catas?s, 2014. "Editorial. Intellectual Capital and Management Control: Human Capital Valuation and other challenges," MANAGEMENT CONTROL, FrancoAngeli Editore, vol. 2014(2), pages 5-21.
    7. Xiaofeng Fan & Akira Yakita, 2011. "Brain drain and technological relationship between skilled and unskilled labor: brain gain or brain loss?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(4), pages 1359-1368, October.

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    More about this item

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

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