Local public funding of higher education when skilled labor is mobile

Moshe Justman and Jacques Thisse

No 1997024, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: Inter-jurisdictional labor mobility when public funding of higher education is sub-federal leads to a disparity between the centralized output-maximizing allocation of resources to education and decentralized equilibria. We show that when local governments choose their level of spending on higher education at a Nash equilibrium, the size and direction of this disparity depend strongly on the political balance of forces at the sub-federal level. The more common case of under-investment can be alleviated through inter-jurisdictional subsidies of local education expenditures based on net migration flows.

JEL-codes: H77 (search for similar items in EconPapers)
Date: 1997-04-01
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:1997024

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