Globalization and human capital formation

Arbeitspapier

This paper compares education investment in closed and open economies without government and with a benevolent government. Closed economies suffer from a holdup problem of excessive redistribution, and governments use education policy as a second-best tool. Globalization that increases labor mobility reduces governments’ incentives to provide subsidized education and increases private individuals’ incentives for investment in their human capital. Globalization can improve welfare, and even restore full efficiency. Governments’ scope for redistribution – which is a substitute for private income insurance – is reduced, and whether efficiency is restored depends on how private insurance markets react to the change in redistribution policy.

Object Details

• Alternative title: Globalisierung und Humankapitalinvestitionen
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: WZB Discussion Paper ; No. FS IV 01-01

Classification and Topics

• Classification: Wirtschaft ; Taxation and Subsidies: Efficiency; Optimal Taxation ; Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
• Subject: Globalization ; commitment ; time consistent income taxation ; migration ; education effort ; Globalisierung ; Selbstbindung ; Zeitkonsistente Besteuerung ; Migration ; Ausbildungsinvestitionen

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Andersson, Frederik ; Konrad, Kai A.
• Event: Veröffentlichung
• (who): Wissenschaftszentrum Berlin für Sozialforschung (WZB)
• (where): Berlin
• (when): 2001

Further information

• Handle: http://hdl.handle.net/10419/51121
• Last update: 10.03.2025, 11:42 AM CET