TY  - RPRT
        AU  - Egger, Hartmut
AU  - Egger, Peter
AU  - Falkinger, Josef
AU  - Grossmann, Volker
        TI  - International Capital Market Integration, Educational Choice and Economic Growth
        PY  - 2005/Nov/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 1863
        UR  - https://www.iza.org/publications/dp1863
        AB  - 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.
        KW  - capital mobility
KW  - educational choice
KW  - capital-skill complementarity
KW  - education policy
KW  - economic growth
KW  - wage income inequality
        ER  -