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Local public funding of higher education when skilled labor is mobile

Author

Listed:
  • JUSTMAN, Moshe

    (Department of Economics and Monaster Center for Economic Research Ben Gurion University of the Negev Beer Sheva, Israel)

  • THISSE, Jacques-Francois

    (Center for Operations Research and Econometrics (CORE), Université catholique de Louvain (UCL), Louvain la Neuve, Belgium)

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.

Suggested Citation

  • JUSTMAN, Moshe & THISSE, Jacques-Francois, 1997. "Local public funding of higher education when skilled labor is mobile," LIDAM Discussion Papers CORE 1997024, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:1997024
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    File URL: https://sites.uclouvain.be/core/publications/coredp/coredp1997.html
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    Citations

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    Cited by:

    1. Gabrielle Demange & Robert Fenge & Silke Uebelmesser, 2014. "Financing Higher Education in a Mobile World," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 16(3), pages 343-371, June.
    2. Hartmut Egger & Josef Falkinger & Volker Grossmann, 2012. "Brain Drain, Fiscal Competition, and Public Education Expenditure," Review of International Economics, Wiley Blackwell, vol. 20(1), pages 81-94, February.
    3. Justman, Moshe & Thisse, Jacques-Francois & van Ypersele, Tanguy, 2002. "Taking the bite out of fiscal competition," Journal of Urban Economics, Elsevier, vol. 52(2), pages 294-315, September.

    More about this item

    JEL classification:

    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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