The problem is that local governments and communities acting in their own self interest will rationally underfund education. Let's say that hypothetically all

The problem is that local governments and communities acting in their own self interest will rationally underfund education. Let's say that hypothetically all new science and engineering jobs are all in ScienceVille. In that case, any local government that doesn't receive some direct tax benefit from taxes collected in SV has negative incentive to teach their students anything about Science, since those students will just leave (after their education has been invested in by the local government) and move to SV to get a job. Those local government are now incentivized to teach their kids anything else (like religion and manual labor) since even if they can only do manual labor at least they're going to stay in their hometown. Now there is a difference of incentives for the individual States verses the Nation. The Nation would prefer to have lots more engineers and skilled tech workers. The States would prefer to keep their best and their brightest, and if that means they are underutilized that's still a local maximum for the individual State. Naturally, this is great for SV, but horrible for the rest of the nation. In this scenario, the entirely imaginary, hypothetical "SV" has to either give something back to incentivize the rest of the nation to keep teaching Science and Engineering, or the rest of the country continually subsidizes SV through education which is unsustainable.