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http://hdl.handle.net/10419/20176
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| Title: | | Acquisition of skills, education subsidies, and agglomeration of firms  |
| Authors: | | Toulemonde, Eric |
| Issue Date: | | 2003 |
| Series/Report no.: | | IZA Discussion paper series 939 |
| Abstract: | | An analytically solvable model of new economic geography is developed. Acquisition of skills is costly for workers but it allows them to earn wages that are larger than those of the unskilled. Moreover, skills acquisition can be subsidized by a regional government. For large transport costs, firms spread more or less evenly between regions, their precise location being determined by the level of education subsidies. For low transport costs, firms agglomerate in one region. We also identify equilibria with partial agglomeration of firms. Finally, we show that the incentives to subsidy education largely depend on the level of transport costs. |
| Subjects: | | economic geography education subsidies |
| JEL: | | J51 R12 F15 F12 |
| Document Type: | | Working Paper |
| Appears in Collections: | | IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)
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