Globalization and Human Capital Formation
27 Pages Posted: 3 Apr 2001
Date Written: January 2001
This paper compares education investment in closed and open economies without government and with a benevolent government. The fact that the time consistency problem in taxation can make labor mobility beneficial even if governments are fully benevolent ? which is known from other contexts ? is shown to be true in the economies considered. It is further shown that labor mobility is unambiguously beneficial if private insurance for human capital investment is available.
Keywords: Globalization, commitment, time consistent income taxation, migration, education effort
JEL Classification: H21, H23
Suggested Citation: Suggested Citation