Literacy traps: Society-wide education and individual skill premia
AbstractUsing a model of O-ring production function, the paper demonstrates how certain communities can get caught in a low-literacy trap in which each individual finds it not worthwhile investing in higher skills because others are not high-skilled. The model sheds light on educational policy. It is shown that policy for promoting human capital has to take the form of a mechanism for solving the coordination failure in people's choice of educational strategy.
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Bibliographic InfoArticle provided by The International Society for Economic Theory in its journal International Journal of Economic Theory.
Volume (Year): 6 (2010)
Issue (Month): 1 ()
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=1742-7355
Other versions of this item:
- Kaushik Basu & Vidya Atal & John Gray & Travis Lee, 2009. "Literacy Traps: Society-wide Education and Individual Skill Premia," Working Papers id:2324, eSocialSciences.
- Atal, Vidya & Basu, Kaushik & Gray, John & Lee, Travis, 2009. "Literacy Traps: Society-wide Education and Individual Skill Premia," IZA Discussion Papers 4047, Institute for the Study of Labor (IZA).
- Atal, Vidya & Basu, Kaushik & Gray, John & Lee, Travis, 2009. "Literacy Traps: Society-Wide Education and Individual Skill Premia," Working Papers 09-05, Cornell University, Center for Analytic Economics.
- D20 - Microeconomics - - Production and Organizations - - - General
- I28 - Health, Education, and Welfare - - Education - - - Government Policy
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
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