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Human capital accumulation in a federation

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  • Coen-Pirani, Daniele

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.

Suggested Citation

  • Coen-Pirani, Daniele, 2015. "Human capital accumulation in a federation," European Economic Review, Elsevier, vol. 76(C), pages 104-124.
    • Handle: RePEc:eee:eecrev:v:76:y:2015:i:c:p:104-124
    DOI: 10.1016/j.euroecorev.2015.02.002
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    More about this item

    Keywords

    Human capital; Education expenditures; Redistribution; Federal; state and local governments;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • I2 - Health, Education, and Welfare - - Education
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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