Mobility and the Role of Education as a Commitment Device

Claudio Thum and Silke Uebelmesser

No 450, CESifo Working Paper Series from CESifo

Abstract: European integration forces system competition within European countries. This competition has important implications for both the public pay-as-you-go pension scheme and the public education system. Without labor mobility, each generation has an incentive to invest in the human capital of the subsequent generation in order to maximize pension payments. It is a popular belief that increasing labor mobility decreases the incentives to finance the education of the subsequent generation. This paper shows that this is not true if human capital investment increases the mobility of the subsequent generation and can thus be used as a commitment device for low taxes.

Keywords: Education; intergenerational transfers; commitment (search for similar items in EconPapers)
Date: 2001
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Related works:
Journal Article: Mobility and the Role of Education as a Commitment Device (2003)
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