Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/75990
Authors: 
Andersson, Fredrik
Konrad, Kai A.
Year of Publication: 
2002
Series/Report no.: 
CESifo Working Paper 703
Abstract: 
This paper considers education investment and public education policy in closed and open economies with an extortionary government. The extortionary government in a closed economy chooses an education policy in order to overcome a hold-up problem of time-consistent taxation similar to benevolent governments. The two types of government differ in their education policies if highly productive labor is mobile. Extortionary governments‘ incentives for a policy that stimulates higher private education efforts vanish; instead they have incentives to prevent individuals from mobility-increasing education investment. Tax competition therefore reduces hold-up problems of time-consistent extortionary taxation, but introduces other distortions that reduce workers' utility.
Subjects: 
migration
education
globalization
commitment
time consistent income taxation
globalisation
Document Type: 
Working Paper

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