Public education under capital mobility

Jean Marie Viaene, Itzhak Zilcha*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


The paper considers a two-country model of overlapping generations economies with intergenerational transfers motivated by altruism and investment in human capital. We examine in a non-stationary competitive equilibrium the optimal provision of education with and without capital market integration. First, we explore how regimes of education provision--public, private or mixed--arise and how they affect the dynamics of autarkic economies. Second, we study the effects of capital market integration, in equilibrium, on the optimal provision of education. Third, we show that capital market integration enhances government intervention in the provision of public education (to improve the welfare of its constituents) and consider various solutions to such a competition.

Original languageEnglish
Pages (from-to)2005-2036
Number of pages32
JournalJournal of Economic Dynamics and Control
Issue number12
StatePublished - 2002


  • Altruism
  • Capital market integration
  • Education
  • Growth
  • Human capital


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