Title

Trade and Divergence in Education Systems

Publication Type

Journal Article

Publication Date

11-2014

Abstract

This article presents a theory on the endogenous choice of education policy and the two-way causal relationship between trade and education systems. A country’s education system determines its talent distribution and comparative advantage; the possibility of trade by raising the returns to the sector of comparative advantage in turn induces countries to further differentiate 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, and yet less than what is socially optimal for the world.

Discipline

Economics | Education

Research Areas

Applied Microeconomics

Publication

International Economic Review

Volume

55

Issue

4

First Page

1251

Last Page

1280

ISSN

0020-6598

Identifier

10.1111/iere.12089

Publisher

Wiley

Additional URL

http://doi.org/10.1111/iere.12089