Human capital accumulation in a federation

Daniele Coen-Pirani

European Economic Review, 2015, vol. 76, issue C, 104-124

Abstract: More than half of the variation across U.S. school districts in real K-12 education expenditures per student is due to differences between, rather than within, states. I study the welfare implications of redistribution of education expenditures by the Federal government, using an analytically tractable model of human capital accumulation with heterogeneous agents and endogenous state policies. The net welfare effect of Federal redistribution depends on a trade-off between the positive effect of redistributing resources toward poorer states and the negative effect resulting from misallocation of population across states. Federal redistribution increases welfare in a calibrated version of the model.

Keywords: Human capital; Education expenditures; Redistribution; Federal, state and local governments (search for similar items in EconPapers)
JEL-codes: E24 H7 I2 J6 (search for similar items in EconPapers)
Date: 2015
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Related works:
Working Paper: Human Capital Accumulation in a Federation (2014)
Working Paper: Human Capital Accumulation in a Federation (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:76:y:2015:i:c:p:104-124

DOI: 10.1016/j.euroecorev.2015.02.002

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