12,000

We have over 12,000 students, from over 100 countries, within one of the safest campuses in the UK

93%

93% of Lancaster students go into work or further study within six months of graduating

Home > Research > Publications & Outputs > Going for growth: overeducation in a tax compet...
View graph of relations

« Back

Going for growth: overeducation in a tax competition game

Research output: Working paper

Published

Publication date2002
Place of publicationLancaster University
PublisherThe Department of Economics
Original languageEnglish

Publication series

NameEconomics Working Paper Series

Abstract

A model of international tax competition is developed in which taxes are raised in order to finance education which in turn raises income. It is shown that, in contrast to results from the tax competition literature, the outcome of a non-cooperative game can be to raise the tax rate, with the result that investment in education exceeds that which is globally socially optimal. This provides an explanation for the tendency for countries to emphasise growth as an objective in spite of what empirical studies tell us about the impact of income on happiness; it also identifies a new type of overeducation.