Brain Drain,Fiscal Competition,and Public Education Expenditure

A two‐country model is developed in this paper to examine the implications of fiscal competition in public education expenditure under international mobility of high‐skilled labor. The authors allow for educational choice, asymmetry of countries with respect to total factor productivity, and tax base effects of migration in source and host country. As the latter may give rise to multiplicity of equilibrium, alternative belief structures of mobile high‐skilled workers are carefully taken into account. The paper also looks at the consequences of bilateral policy coordination. While in line with other studies on tax competition, bilateral coordination can reduce the under‐investment problem in public education spending, it also tends to hinder migration or may even reverse the direction of the migration flow that materializes under non‐cooperative policy setting. As a result of its potentially adverse effects on migration patterns, bilateral coordination may therefore reduce global welfare and bring the world economy further away from the social planner's solution.     

Energy and habitat: Designing a sustainable urban ecosystem

As the world's cities grow so new ways of satisfying their demands for food and fuel resources will have to be found, especially in the third world where total fuel demands are expected to expand several fold in one generation. An ecological model for a future complex urban community is presented to illustrate the place of energy in a growing system and how habitat—the physical component—possesses life cycles interdependent with living species. Recycling, biomass fuels, telecommunications, marine living and the propagation of viable organizations are all elements that will enable the globe to sustain future expanding metropolises.     

Preservation: Planning for the survival of things

Preservation—the immortalisation of living and designed things—is a channel for transmitting messages from the past to the future. Image is all important for conveying the meaning. To be preserved, a thing must have a constituency of supporters and a long-lived institution to serve as trustee: when appreciators of the message are no longer recruited, extinction is at hand. Community ecology, if extended to images, suggests some appropriate preservation policies for societies approaching steady state, eg adding to the total stock of biomass, to diversity, and to useful knowledge, while promoting new organised relationships between man and environment.     

Book reviews

Ohne Zusammenfassung     

Habilitation von Dr. Erich Lamp in Mainz

Ohne Zusammenfassung     

How to promote R&D-based growth? Public education expenditure on scientists and engineers versus R&D subsidies

This paper compares the positive and normative implications of two alternative measures to promote R&D-based growth: R&D subsidies to firms and publicly provided education targeted to the development of science and engineering (S&E) skills. The model accounts for the specificity of S&E skills, where individuals with heterogeneous ability choose their type of education. Although intertemporal knowledge spillovers are the only R&D externality, the analysis suggests that R&D subsidies may be detrimental to both productivity growth and welfare. Moreover, they raise earnings inequality. In contrast to R&D subsidies, publicly provided education targeted to S&E skills are found to be unambiguously growth-promoting and neutral with respect to the earnings distribution.     

Long-Term Care Insurance and Life Insurance Demand

This article investigates the interaction between life insurance and long-term care insurance markets on the demand side. In the model utility depends on both consumption and bequest, and utility from consumption is contingent on the state of health. While the demand for life insurance increases both with decreasing income and with a rising degree of altruism, the influences of these two parameters on the demand for long-term care insurance are ambiguous. If the utility shock arising from disability declines, both insurance demands will rise.