Wednesday, February 21, 2007

It's true for us too 

Doc Palmer makes the point that human capital is also quicksilver.
In the increasingly global economy, or even with increased mobility within Canada, it is not at all clear to me that Canada, especially Eastern Canada, has or should try to develop, a comparative advantage in the production of graduate education. Instead, we should ship our good undergraduate students to the U.S. and elsewhere ..., let the taxpayers of those jurisdictions foot the majority of the bill for the education, and then hire all the people we want (not need!) from those places.
So who has a comparative advantage in producing graduate education? Maybe it's places that experience increasing returns to innovation. But that would mean that there's path dependency -- if Minnesota or Ontario or wherever is lucky enough to get a glop of really bright people at a university, we should continue to fund them because they can attract additional smarties at lower cost than a new university elsewhere. And once you let the pool of talent run out, it's more expensive to rebuild.

Not unlike the Kevin Garnett argument.

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