Investments in Education in a Two-Sector, Random Matching Economy
AbstractWe consider a random matching model where heterogeneous agents endogenously choose to invest time and real resources in education. Generically in the space of the economies, there is an open interval of possible lengths of schooling such that, at at least one of the associated steady states equilibria, some agents, but not all of them, choose to invest. Regular steady state equilibria are constrained Pareto inefficient in a strong sense. The Hosios (1990) condition is neither necessary, nor sufficient, for constrained Pareto optimality. We also provide restrictions on the fundamentals, which are sufficient to guarantee that equilibria are characterized by overeducation (undereducation), and present some results on their comparative static properties.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia in its series Working Paper CRENoS with number 200809.
Date of creation: 2008
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-07-14 (All new papers)
You can help add them by filling out this form.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Antonello Pau).
If references are entirely missing, you can add them using this form.