IZA DP No. 2478: Public Education in an Integrated Europe: Studying to Migrate and Teaching to Stay?
published in: Scandinavian Journal of Economics, 2008, 110 (3), 591–608
This paper analyzes public provision of internationally applicable and country-specific education, when job opportunities available to those with internationally applicable education are uncertain. Migration provides a market insurance in case labor market opportunities in the home country are poor. An increasing international applicability of a given type of education encourages students to invest more effort when studying. Governments, on the other hand, face an incentive to divert the provision of public education away from internationally applicable education toward country-specific skills. This would mean educating too few engineers, economists and doctors, and too many lawyers.