Constitutional Economics and Public Institutions
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Constitutional Economics and Public Institutions

  • New Thinking in Political Economy series

Edited by Francisco Cabrillo and Miguel A. Puchades-Navarro

This extensive book explores in detail a wide range of topics within the public choice and constitutional political economy tradition, providing a comprehensive overview of current work across the field.
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Chapter 11: Higher education as private good and as quasi public good: the case of Italy

Silvia Fedeli and Francesco Forte

Extract

Human capital is central for economic development. An increase of the human capital may determine an increased rate of GDP growth (Lucas, 1988; Romer, 1986, 1990; Benhabib and Spiegel, 1994) allowing higher per capita wages, even with a constant labour force. According to Galor and Weil (2000) the trend to a stationary or decreasing population is due to the tendency of parents to invest in the quality of children rather than in their number. A virtuous circle may ensue that the increase in the quality of human capital replaces the demographic failure in sustaining economic growth. There is no assurance, however, that the virtuous circle is automatic. If the market mechanism is not sufficient, public policy must be devoted to increasing the human capital level, as a quasi public good, where it gives the highest social returns. Moreover, higher education per se may not be a sufficient condition to get the virtuous circle: scientific and technological research may be needed. To this end, qualified higher education is required. Thus, its character of quasi public good re-emerges.

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