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Federalism, Education-Related Public Good and Growth when Agents are Heterogeneou

  • Floriana Cerniglia

    ()

  • Riccarda Longaretti

In this paper we use an endogeneous-growth model with human capital and heterogeneous agents to analyse the relationship between fiscal federalism and economic growth. Results show that federalism, which allows education-related public good levels to be tailored on the human capital of heterogeneous agents, increases human capital accumulation. This in turn leads to higher rates of growth. The benefits of federalism are stronger the larger the intra-jurisdiction variance of agents’ human capital.

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File URL: http://dipeco.economia.unimib.it/repec/pdf/mibwpaper138.pdf
File Function: First version, 2008
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Paper provided by University of Milano-Bicocca, Department of Economics in its series Working Papers with number 138.

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Length: 18 pages
Date of creation: May 2008
Date of revision: May 2008
Handle: RePEc:mib:wpaper:138
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  25. Besley, Timothy & Coate, Stephen, 2003. "Centralized versus decentralized provision of local public goods: a political economy approach," Journal of Public Economics, Elsevier, vol. 87(12), pages 2611-2637, December.
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