Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/76333 
Authors: 
Year of Publication: 
2003
Series/Report no.: 
CESifo Working Paper No. 937
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
This paper analyzes regional public education policy in the presence of mobile workers. Labor market integration leads to fiscal competition, shifting the whole burden of taxation to immobile workers. In the case of mobile skilled workers, this results in income inequalities and inefficient low investment in human capital. This is even more pronounced if politicians are partly self-interested. In contrast, if unskilled workers are mobile, all households receive the same net earnings. In this scenario, a benevolent government ensures an efficient level of human capital investment, while partly selfish politicians choose to invest too little in education.
Subjects: 
education policy
factor mobility
Document Type: 
Working Paper
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