%0 Report
        %A Egger, Hartmut
%A Egger, Peter
%A Falkinger, Josef
%A Grossmann, Volker
        %T International Capital Market Integration, Educational Choice and Economic Growth
        %D 2005
        %8 2005 Nov
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 1863
        %U https://www.iza.org/publications/dp1863
        %X This paper examines the impact of capital market integration (CMI) on higher education and economic growth. We take into account that participation in higher education is non-compulsory and depends on individual choice. Integration increases (decreases) the incentives to participate in higher education in capital-importing (-exporting) economies, all other things equal. Increased participation in higher education enhances productivity progress and is accompanied by rising wage inequality. From a national policy point of view, education expenditure should increase after integration of similar economies. Using foreign direct investment (FDI) as a measure for capital flows, we present empirical evidence which largely confirms our main hypothesis: An increase in net capital inflows in response to CMI raises participation in higher education and thereby fosters economic growth. We apply a structural estimation approach to fully track the endogenous mechanisms of the model.
        %K capital mobility
%K educational choice
%K capital-skill complementarity
%K education policy
%K economic growth
%K wage income inequality