IDEAS home Printed from https://ideas.repec.org/p/sap/wpaper/wp138.html
   My bibliography  Save this paper

Lobbying for Education in a Two-sector Model

Author

Listed:
  • Debora Di Gioacchino
  • Paolo Profeta

Abstract

Modern economies devote a relevant share of their resources to education. However, even among industrialised countries, there are di􀀞erences in the traits of the education system and in its outcome in terms of human capital composition. The question we pose in this paper is why the composition of human capital is so diversified. The answer we propose is that the education system responds to the economy’’s structure of production. Skills are required by firms according to their needs and are supplied through the education system. We analyse the political economy of education in a two-period model in which heterogeneous firms, specialised in two di􀀞erent sectors, try to induce the government to finance the type of education which is complementary to their production. In the first period, the policy-maker decides the skill composition of new-workers which will determine the supply of skills in the second period. Firms may lobby to obtain their preferred skill composition. We show that in the political equilibr um in which firms in both sectors get organised, the policy-maker chooses the same skill composition that would be chosen by the social planner. Moving to endogenous lobbying, we are able to show that, if there are no costs of lobbying, then both sectors will lobby in equilibrium. However, in the more realistic case in which if lobbying is costly it may be that only one sector will find it profitable to offer monetary contribution; which sector gets organised depends on sectors’’ share in total output, relative productivity and prices of the two sectors.

Suggested Citation

  • Debora Di Gioacchino & Paolo Profeta, 2010. "Lobbying for Education in a Two-sector Model," Working Papers 138, University of Rome La Sapienza, Department of Public Economics.
  • Handle: RePEc:sap:wpaper:wp138
    as

    Download full text from publisher

    File URL: http://www.dipecodir.it/upload/wp/pdf/wp138.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Grossman, Gene M & Helpman, Elhanan, 1994. "Protection for Sale," American Economic Review, American Economic Association, vol. 84(4), pages 833-850, September.
    2. repec:ags:afjare:141665 is not listed on IDEAS
    3. Jérôme Vandenbussche & Philippe Aghion & Costas Meghir, 2006. "Growth, distance to frontier and composition of human capital," Journal of Economic Growth, Springer, vol. 11(2), pages 97-127, June.
    4. Richard E. Baldwin & Frédéric Robert-Nicoud, 2007. "Entry and Asymmetric Lobbying: Why Governments Pick Losers," Journal of the European Economic Association, MIT Press, vol. 5(5), pages 1064-1093, September.
    5. Kevin M. Murphy & Andrei Shleifer & Robert W. Vishny, 1991. "The Allocation of Talent: Implications for Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 503-530.
    6. Gene M. Grossman & Elhanan Helpman, 1996. "Electoral Competition and Special Interest Politics," Review of Economic Studies, Oxford University Press, vol. 63(2), pages 265-286.
    7. Leonardo Felli & Antonio Merlo, 2006. "Endogenous Lobbying," Journal of the European Economic Association, MIT Press, vol. 4(1), pages 180-215, March.
    8. Di Gioacchino, Debora & Sabani, Laura, 2009. "Education policy and inequality: A political economy approach," European Journal of Political Economy, Elsevier, vol. 25(4), pages 463-478, December.
    9. Oded Galor & Omer Moav, 2000. "Das Human Kapital," Working Papers 2000-17, Brown University, Department of Economics.
    10. Alstadsæter, Annette & Kolm, Anne-Sofie & Larsen, Birthe, 2005. "Money or Joy," Working Papers 23-2005, Copenhagen Business School, Department of Economics.
    11. Oded Galor & Omer Moav, 2006. "Das Human-Kapital: A Theory of the Demise of the Class Structure," Review of Economic Studies, Oxford University Press, vol. 73(1), pages 85-117.
    12. Daron Acemoglu, 2002. "Technical Change, Inequality, and the Labor Market," Journal of Economic Literature, American Economic Association, vol. 40(1), pages 7-72, March.
    13. Graziella Bertocchi and Michael Spagat, 2001. "The Evolution of Modern Educational Systems," Royal Holloway, University of London: Discussion Papers in Economics 01/4, Department of Economics, Royal Holloway University of London, revised Sep 2001.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ivo Bischoff & Julia Hauschildt, 2017. "Vocational Schools as an Instrument of Interregional Competition – Empirical Evidence from German Counties," MAGKS Papers on Economics 201722, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    2. Debora Di Gioacchino & Alina Verashchagina, 2017. "Mass media and attitudes to inequality," Working Papers 178, University of Rome La Sapienza, Department of Public Economics.
    3. Debora Di Gioacchino & Laura Sabani & Simone Tedeschi, 2016. "Differences in education systems across OECD countries: the role of education policy preferences in a hierarchical system," Working Papers 177, University of Rome La Sapienza, Department of Public Economics.
    4. repec:kap:jeczfn:v:123:y:2018:i:3:d:10.1007_s00712-017-0575-z is not listed on IDEAS

    More about this item

    Keywords

    Endogenous lobbying; human capital composition; structure of production.;

    JEL classification:

    • I2 - Health, Education, and Welfare - - Education
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sap:wpaper:wp138. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Luisa Giuriato). General contact details of provider: http://edirc.repec.org/data/dprosit.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.