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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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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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  7. Pike, Andy J & Rodriguez-Pose, Andres & Tomaney, John & Torrisi, Gianpiero & Tselios, Vassilis, 2011. "Income inequality, decentralisation and regional development in Western Europe," CEPR Discussion Papers 8575, C.E.P.R. Discussion Papers.
  8. Yakita, Akira, 2003. "Taxation and growth with overlapping generations," Journal of Public Economics, Elsevier, vol. 87(3-4), pages 467-487, March.
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  17. Martinez-Vazquez, Jorge & McNab, Robert M., 2003. "Fiscal Decentralization and Economic Growth," World Development, Elsevier, vol. 31(9), pages 1597-1616, September.
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  19. Galiani, Sebastian & Gertler, Paul & Schargrodsky, Ernesto, 2008. "School decentralization: Helping the good get better, but leaving the poor behind," Journal of Public Economics, Elsevier, vol. 92(10-11), pages 2106-2120, October.
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