Subsidizing Education in the Economic Periphery: Another Pitfall of Regional Policies?

33 Pages Posted: 18 Apr 2003

See all articles by Jens Suedekum

Jens Suedekum

Heinrich-Heine-University Duesseldorf, Duesseldorf Institute for Competition Economics (DICE); Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute); Institute for the Study of Labor (IZA)

Date Written: 2002

Abstract

One of the most prominent instruments of regional policy is to foster education and human capital formation in economically lagging regions. However, regional policy of this type can actually hurt instead of help the poor areas. The reason is that individual geographical mobility increases with the personal skill level. Through education subsidies, particularly if targeted on relatively high skilled workers, individuals can cross some threshold level of qualification beyond which emigration accrues. Regional policies then result in a human capital flight harmful to individuals remaining in the economic periphery. This fatal result does not hold for such policies that foster basic education and focus on the relatively low skilled.

Keywords: Regional Policy, Education Subsidies, Human Capital, Labour Mobility, European Union

JEL Classification: H3, F4, R1

Suggested Citation

Südekum, Jens, Subsidizing Education in the Economic Periphery: Another Pitfall of Regional Policies? (2002). Available at SSRN: https://ssrn.com/abstract=370620 or http://dx.doi.org/10.2139/ssrn.370620

Jens Südekum (Contact Author)

Heinrich-Heine-University Duesseldorf, Duesseldorf Institute for Competition Economics (DICE) ( email )

Universitaetsstr. 1
Duesseldorf, NRW 40225
Germany

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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

Poschinger Str. 5
Munich, DE-81679
Germany

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
84
Abstract Views
1,388
rank
329,695
PlumX Metrics