Logo Logo
Switch Language to English
Andersson, Fredrik und Konrad, Kai A. (Januar 2001): Globalization and Human Capital Formation. IZA Discussion Paper
Volltext auf 'Open Access LMU' nicht verfügbar.
Externer Volltext: http://ftp.iza.org/dp245.pdf


This Paper compares education investment in closed and open economies without government and with a benevolent government. Closed economies suffer from a hold-up problem of excessive redistribution, and governments use education policy as a second-best tool. Globalization that increases labour 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.