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Poutvaara, Panu (2006): On human capital formation with exit options: Comment and new results. CESifo Working Paper, 1648
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Katz and Rapoport (2005) conclude that with linear production technology and the possibility of unilateral migration, region-specific shocks may increase the average level of education. Previously, Poutvaara (2000) derived a corresponding result with Cobb-Douglas technology and migration which may go in both directions. This paper shows that the exit option may reduce human capital formation with a quadratic production technology.