'See you soon?!' Mobility, competition and free-riding in decentralized higher education financing. Issue 4 (3rd April 2021)

• Record Type: Journal Article
• Authors: Geissler, Matthias; König, Johannes
• Is Part Of: Regional studies. Volume 55:Issue 4(2021)
• Page Start: 665
• Page End: 678
• Publication Date: 2021-04-03
• Subjects: graduate mobility -- individual taste variation -- mixed logit -- educational underinvestment; C35 -- I28 -- J61 -- R23; Regional planning -- Periodicals; Regional planning -- Great Britain -- Periodicals; 307.14
• DOI: 10.1080/00343404.2020.1851023
• Languages: English
• ISSNs: 0034-3404

Abstract

ABSTRACT: Highly skilled human capital is usually also highly mobile. Concerns regarding interregional migration revolve around suboptimal public financing of higher education rooted in free-riding behaviour if budget responsibilities are decentralized. This investigation sets out to answer whether cross-state mobility of students in general and individual taste variation in the preference for 'home' and 'university' states in particular justify concerns about the free-riding behaviour of state governments. We analyse graduates' location choices when leaving university using a mixed logit model and subsequently relate the revealed taste variation to individual characteristics. The results suggest some attachment to 'home' states that justify concerns about potential free-riding. However, substantial taste variation exists and is partly associated with the quality of human capital. State governments free-riding on the investment of others therefore may face a quality trade-off.