Journal article
OPTIMAL EDUCATION POLICIES AND COMPARATIVE ADVANTAGE
Pacific economic review (Oxford, England), Vol.16(5), pp.538-552
12/2011
DOI: 10.1111/j.1468-0106.2011.00563.x
Abstract
We consider the optimal education policies of a small economy whose government has a limited budget. Initially, the economy is closed and the government chooses its education policy to maximize welfare under autarky. When the economy trades with the rest of the world the government chooses a new education policy that maximizes welfare under trade. Is it ever optimal for the government to choose its new policy so that it reverses the economy's comparative advantage? We find that if the budget stays fixed when it is optimal to move up the skills chain it is not feasible. In such a case, a foreign loan is welfare improving. A move in the opposite direction can be optimal, and when it is optimal it is also feasible.
Details
- Title: Subtitle
- OPTIMAL EDUCATION POLICIES AND COMPARATIVE ADVANTAGE
- Creators
- Spiros Bougheas - University of NottinghamRichard Kneller - University of NottinghamRaymond Riezman - University of Iowa
- Resource Type
- Journal article
- Publication Details
- Pacific economic review (Oxford, England), Vol.16(5), pp.538-552
- DOI
- 10.1111/j.1468-0106.2011.00563.x
- ISSN
- 1361-374X
- eISSN
- 1468-0106
- Publisher
- Wiley
- Number of pages
- 15
- Language
- English
- Date published
- 12/2011
- Academic Unit
- Economics
- Record Identifier
- 9984963120002771
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