Publication Type
Working Paper
Version
publishedVersion
Publication Date
12-2010
Abstract
This paper presents a theory on the endogenous choice of a country's education policy and the two-way causal relationship between trade and education systems. The setting of a country's education system determines its talent distribution and comparative advantage in trade; the possibility of trade by raising the returns to the sector of comparative advantage in turn induces countries to further diferentiate their education systems and reinforces the initial pattern of comparative advantage. Specifically, the Nash equilibrium choice of education systems by two countries interacting strategically are necessarily more divergent than their autarky choices, although the difference is still less than what is socially optimal for the world. We provide some preliminary empirical evidence on the relationship between education, talent distribution, and trade.
Keywords
Education System, Talent Distribution, Comparative Advantage, Trade Pattern.
Discipline
Education | Education Policy | International Economics
Research Areas
International Economics
First Page
1
Last Page
46
Publisher
SMU Economics and Statistics Working Paper Series, No. 33-2010
City or Country
Singapore
Citation
CHANG, Pao Li and HUANG, Fali.
Trade and divergence in education systems. (2010). 1-46.
Available at: https://ink.library.smu.edu.sg/soe_research/1248
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Comments
Published in International Economic Review, 2014, https://doi.org/10.1111/iere.12089