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The paper considers a two-country model of overlapping generations economies with intergenerational transfers carried out in the form of bequest and investment in human capital. We examine in competitive equilibrium the optimal provision of education with and without capital markets integration....
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An optimal education subsidy formula is derived using an overlapping generations model with parental altruism. The … model predicts that public education subsidy is greater in economies with lesser parental altruism because a benevolent … the other hand, growth is higher in economies with greater parental altruism. Cross-country regressions using the World …
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