Local Public Funding of Higher Education when Skilled Labor is Imperfectly Mobile

Moshe Justman, Jacques François Thisse

Research output: Contribution to journalArticlepeer-review

28 Scopus citations


If higher education is publicly funded by local (sub-federal) jurisdictions, while skilled labor is heterogeneous in responding to wage differentials between jurisdictions, the spillovers that result give rise to a disparity between the centralized output-maximizing allocation of resources to higher education and decentralized equilibria. Generally, decentralization leads to under-provision, which can be offset by inter-jurisdictional subsidies based on gross migration flows. But the extent of the discrepancy depends on the local balance of political forces. Indeed, when the welfare of native-born emigrants is highly valued while new immigrants carry little political weight, over-provision in equilibrium is possible.

Original languageEnglish
Pages (from-to)247-258
Number of pages12
JournalInternational Tax and Public Finance
Issue number3
StatePublished - 1 Jan 2000


  • Education
  • Fiscal federalism
  • Labor mobility
  • Local public finance

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


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