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Globalization and human capital formation

Globalisierung und Humankapitalinvestitionen

Fredrik Andersson () and Kai Konrad ()

No FS IV 01-01, Discussion Papers, Research Unit: Market Processes and Governance from WZB Berlin Social Science Center

Abstract: This paper compares education investment in closed and open economies without government and with a benevolent government. Closed economies suffer from a holdup problem of excessive redistribution, and governments use education policy as a second-best tool. Globalization that increases labor mobility reduces governments’ incentives to provide subsidized education and increases private individuals’ incentives for investment in their human capital. Globalization can improve welfare, and even restore full efficiency. Governments’ scope for redistribution – which is a substitute for private income insurance – is reduced, and whether efficiency is restored depends on how private insurance markets react to the change in redistribution policy.

Keywords: Globalization; commitment; time consistent income taxation; migration; education effort; Globalisierung; Selbstbindung; Zeitkonsistente Besteuerung; Migration; Ausbildungsinvestitionen (search for similar items in EconPapers)
JEL-codes: H21 H23 (search for similar items in EconPapers)
Date: 2001
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https://www.econstor.eu/bitstream/10419/51121/1/332464075.pdf (application/pdf)

Related works:
Working Paper: Globalization and Human Capital Formation (2001) Downloads
Working Paper: Globalization and Human Capital Formation (2001) Downloads
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