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Title:Subsidizing education in the economic periphery : another pitfall or regional policies? PDF Logo
Authors:Südekum, Jens
Issue Date:2002
Series/Report no.:HWWA Discussion Paper 209
Abstract:One of the most prominent instruments of regional policy is to foster education and human capital formation in economically lagging regions. However, regional policy of this type can actually hurt instead of help the poor areas. The reason is that individual geographical mobility increases with the personal skill level. Through education subsidies, particularly if targeted on relatively high skilled workers, individuals can cross some threshold level of qualification beyond which emigration accrues. Regional policies then result in a human capital flight harmful to individuals remaining in the economic periphery. This fatal result does not hold for such policies that foster basic education and focus on the relatively low skilled.
Subjects:Regional Policy
Education Subsidies
Human Capital
Labour Mobility
European Union
JEL:F4
R1
H3
Document Type:Working Paper
Appears in Collections:HWWA Discussion Paper, Hamburgisches Welt-Wirtschafts-Archiv

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