Bulletin n. 2-3/2013 | ||
February 2014 | ||
Cerniglia Floriana, Longaretti Riccarda |
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Federalism, education-related public good and growth when agents are heterogeneous | ||
in Journal of Economics - Zeitschrift fur Nationalokonomie , Volume 109, Issue 3, July 2013 , 2013 , 271-301 | ||
In this paper we use an endogenous-growth model with human capital and heterogeneous agents to analyse the relationship between fiscal federalism and economic growth. The results show that federalism, which allows education-related public good levels to be tailored to the local distribution of human capital, increases human capital accumulation. This in turn leads to higher rates of growth. The benefits of federalism are stronger, the larger the intra-jurisdiction variance of agents’ human capital. | ||