Publication Type
Journal Article
Version
submittedVersion
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
Citation
HUANG, Fali and CHANG, Pao-Li.
Trade and divergence in education systems. (2014). International Economic Review. 55, (4), 1251-1280.
Available at: https://ink.library.smu.edu.sg/soe_research/1534
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.
Additional URL
https://doi.org/10.1111/iere.12089