Mobility and the Role of Education as a Commitment Device

22 Pages Posted: 30 May 2001

See all articles by Claudio Thum

Claudio Thum

University of Munich, CES; CESifo (Center for Economic Studies and Ifo Institute)

Silke Uebelmesser

Friedrich-Schiller-Universität Jena - School of Economics and Business Administration; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: April 2001

Abstract

European integration forces system competition within European countries. This competition has important implications for both the public pay-as-you-go pension scheme and the public education system. Without labor mobility, each generation has an incentive to invest in the human capital of the subsequent generation in order to maximize pension payments. It is a popular belief that increasing labor mobility decreases the incentives to finance the education of the subsequent generation. This paper shows that this is not true if human capital investment increases the mobility of the subsequent generation and can thus be used as a commitment device for low taxes.

Keywords: Education, Intergenerational Transfers, Commitment

JEL Classification: H52, H55

Suggested Citation

Thum, Claudio and Uebelmesser, Silke, Mobility and the Role of Education as a Commitment Device (April 2001). Available at SSRN: https://ssrn.com/abstract=270176 or http://dx.doi.org/10.2139/ssrn.270176

Claudio Thum (Contact Author)

University of Munich, CES ( email )

Schackstr. 4
Department of Economics
80539 Munich
Germany
49 89 2180 3104 (Phone)
49 89 39 73 03 (Fax)

HOME PAGE: http://www.CESifo.de

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Silke Uebelmesser

Friedrich-Schiller-Universität Jena - School of Economics and Business Administration ( email )

Carl-Zeiss-Str. 3
D-07743 Jena
Germany

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de