Economics, Econometrics and Finance
4 years ago

Exit options may hinder education growth in regions hit by shocks.

SSRN Electronic Journal
On Human Capital Formation with Exit Options: Comment and New Results
Panu Poutvaara

Paper Summary

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The study found that having the option to leave a region can actually decrease the level of education in that area when using a specific type of production technology. This is different from previous research that suggested region-specific shocks could increase education levels.