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‘See you soon?!’ Mobility, competition and free-riding in decentralized higher education financing

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  • Matthias Geissler
  • Johannes König

Abstract

Highly skilled human capital is usually also highly mobile. Concerns regarding interregional migration revolve around suboptimal public financing of higher education rooted in free-riding behaviour if budget responsibilities are decentralized. This investigation sets out to answer whether cross-state mobility of students in general and individual taste variation in the preference for ‘home’ and ‘university’ states in particular justify concerns about the free-riding behaviour of state governments. We analyse graduates’ location choices when leaving university using a mixed logit model and subsequently relate the revealed taste variation to individual characteristics. The results suggest some attachment to ‘home’ states that justify concerns about potential free-riding. However, substantial taste variation exists and is partly associated with the quality of human capital. State governments free-riding on the investment of others therefore may face a quality trade-off.

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  • Matthias Geissler & Johannes König, 2021. "‘See you soon?!’ Mobility, competition and free-riding in decentralized higher education financing," Regional Studies, Taylor & Francis Journals, vol. 55(4), pages 665-678, April.
    • Handle: RePEc:taf:regstd:v:55:y:2021:i:4:p:665-678
    DOI: 10.1080/00343404.2020.1851023
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    Cited by:

    1. Felix Ehrenfried & Thomas A. Fackler & Valentin Lindlacher & Thomas Fackler, 2022. "New Region, New Chances: Does Moving Regionally for University Shape Later Job Mobility?," CESifo Working Paper Series 9922, CESifo.

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