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Optimal higher education enrollment and productivity externalities in a two-sector model

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  • Volker Meier

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  • Ioana Schiopu

Abstract

We investigate externalities in higher education enrollment over the course of development in a two-sector model. Each sector works with only one type of labor, skilled or unskilled, and individuals are differentiated according to their cost of acquiring human capital.Both sectors exhibit productivity externalities in the size of the skill-specific labor and in the average human capital of workers. When skill-biased technological change prevails, it may well be the case that intermediate stages of development witness underenrollment in higher education, while highly developed economies experience overenrollment.

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Bibliographic Info

Paper provided by Ifo Institute for Economic Research at the University of Munich in its series Ifo Working Paper Series with number Ifo Working Paper No. 170.

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Date of creation: 2013
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Handle: RePEc:ces:ifowps:_170

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Keywords: Higher education; enrollment; externalities; two-sector model.;

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  1. Oded Galor & Joseph Zeira, 2013. "Income Distribution and Macroeconomics," Working Papers 2013-12, Brown University, Department of Economics.
  2. Natalia Danzer, 2013. "Job Satisfaction and Self-Selection into the Public or Private Sector: Evidence from a Natural Experiment," Ifo Working Paper Series Ifo Working Paper No. 169, Ifo Institute for Economic Research at the University of Munich.
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