An Economic Theory of Education Externalities: Effects of Education Capital
The source of education externalities has been mostly explained based on the concept of human capital, but this concept is very elastic, so the mechanism behind education externalities has not necessarily been sufficiently explained theoretically. In this paper, I construct a model of education externalities based on the concept of education capital, and show that it is education capital, not human capital, that generates education externalities. Unlike human capital, the effects of education capital have upper bounds because there is a division of labor (i.e., there are specialists). The uncovered mechanism of education externalities has the potential to provide many valuable insights for educational institutions and policy. For example, elementary schools should basically be compulsory, but whether education (not research) in universities should be subsidized by governments may depend on the degree of generosity of high-income people.
The Copyright Transfer Form to ASERS Publishing (The Publisher)
This form refers to the manuscript, which an author(s) was accepted for publication and was signed by all the authors.
The undersigned Author(s) of the above-mentioned Paper here transfer any and all copyright-rights in and to The Paper to The Publisher. The Author(s) warrants that The Paper is based on their original work and that the undersigned has the power and authority to make and execute this assignment. It is the author's responsibility to obtain written permission to quote material that has been previously published in any form. The Publisher recognizes the retained rights noted below and grants to the above authors and employers for whom the work performed royalty-free permission to reuse their materials below. Authors may reuse all or portions of the above Paper in other works, excepting the publication of the paper in the same form. Authors may reproduce or authorize others to reproduce the above Paper for the Author's personal use or for internal company use, provided that the source and The Publisher copyright notice are mentioned, that the copies are not used in any way that implies The Publisher endorsement of a product or service of an employer, and that the copies are not offered for sale as such. Authors are permitted to grant third party requests for reprinting, republishing or other types of reuse. The Authors may make limited distribution of all or portions of the above Paper prior to publication if they inform The Publisher of the nature and extent of such limited distribution prior there to. Authors retain all proprietary rights in any process, procedure, or article of manufacture described in The Paper. This agreement becomes null and void if and only if the above paper is not accepted and published by The Publisher, or is with drawn by the author(s) before acceptance by the Publisher.