Advanced Search
MyIDEAS: Login to save this paper or follow this series

A Microfoundation For Increasing Returns In Human Capital Accumulation And The Under-Participation Trap

Contents:

Author Info

  • Alison Booth

    ()

  • Melvyn Coles

Abstract

This paper considers educational investment, wages and hours of market work in an imperfectly competitive labour market with heterogeneous workers and home production. It investigates the degree to which there might be both underemployment in the labour market and underinvestment in education. A central insight is that the ex-post participation decision of workers endogenously generates increasing marginal returns to education. Although equilibrium implies underinvestment in education, optimal policy is not to subsidise education. Instead it is to subsidise labour market participation which we argue might be efficiently targeted as state-provided childcare support.

Download Info

If 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.
File URL: http://cbe.anu.edu.au/research/papers/camawpapers/Papers/2007/Booth_Coles_72007.pdf
Our checks indicate that this address may not be valid because: 404 Not Found. If this is indeed the case, please notify (Cama Admin)
Download Restriction: no

Bibliographic Info

Paper provided by Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University in its series CAMA Working Papers with number 2007-07.

as in new window
Length: 26 pages
Date of creation: Feb 2007
Date of revision:
Handle: RePEc:een:camaaa:2007-07

Contact details of provider:
Postal: Crawford Building, Lennox Crossing, Building #132, Canberra ACT 0200
Phone: +61 2 6125 4705
Fax: +61 2 6125 5448
Email:
Web page: http://cama.crawford.anu.edu.au
More information through EDIRC

Related research

Keywords:

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Wrohlich, Katharina, 2005. "The Excess Demand for Subsidized Child Care in Germany," IZA Discussion Papers 1515, Institute for the Study of Labor (IZA).
  2. V. Bhaskar & Ted To, 1996. "Minimum Wages for Ronald McDonald Monopsonies: A Theory of Monopsonistic Competition," Labor and Demography, EconWPA 9603001, EconWPA, revised 21 May 1996.
  3. Postel-Vinay, Fabien & Robin, Jean-Marc, 2002. "Equilibrium Wage Dispersion with Worker and Employer Heterogeneity," CEPR Discussion Papers, C.E.P.R. Discussion Papers 3548, C.E.P.R. Discussion Papers.
  4. Alan Manning & Ted To, 2002. "Oligopsony and Monopsonistic Competition in Labor Markets," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 16(2), pages 155-174, Spring.
  5. Alison Booth & Melvyn Coles, 2010. "Education, Matching, and the Allocative Value of Romance," Journal of the European Economic Association, MIT Press, MIT Press, vol. 8(4), pages 744-775, 06.
  6. Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, The MIT Press, edition 1, volume 1, number 0262161877, December.
  7. Barbara Petrongolo, 2004. "Gender segregation in employment contracts," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 3662, London School of Economics and Political Science, LSE Library.
  8. Burdett, Kenneth & Mortensen, Dale T, 1998. "Wage Differentials, Employer Size, and Unemployment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(2), pages 257-73, May.
  9. Petrongolo, Barbara, 2004. "Gender Segregation in Employment Contracts," CEPR Discussion Papers, C.E.P.R. Discussion Papers 4303, C.E.P.R. Discussion Papers.
  10. Stevens, Margaret, 1994. "A Theoretical Model of On-the-Job Training with Imperfect Competition," Oxford Economic Papers, Oxford University Press, vol. 46(4), pages 537-62, October.
  11. Daron Acemoglu & Jorn-Steffen Pischke, 1999. "The Structure of Wages and Investment in General Training," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 107(3), pages 539-572, June.
  12. Booth, Alison L & Coles, Melvyn G & Gong, Xiaodong, 2007. "Increasing Returns to Education: Theory and Evidence," CEPR Discussion Papers, C.E.P.R. Discussion Papers 6266, C.E.P.R. Discussion Papers.
  13. Acemoglu, Daron, 1996. "A Microfoundation for Social Increasing Returns in Human Capital Accumulation," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 111(3), pages 779-804, August.
  14. Apps, P.F. & Rees, R., 1996. "Collective Labor Supply and Household Production," Papers, Australian National University - Department of Economics 301, Australian National University - Department of Economics.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Booth, A.L. & Coles, M.G., 2010. "Tax policy and returns to education," Labour Economics, Elsevier, Elsevier, vol. 17(1), pages 291-301, January.
  2. Booth, Alison L. & Kee, Hiau Joo, 2006. "Intergenerational Transmission of Fertility Patterns in Britain," IZA Discussion Papers 2437, Institute for the Study of Labor (IZA).
  3. Andrea Caragliu & Peter Nijkamp, 2011. "Cognitive Capital and Islands of Innovation: The Lucas Growth Model from a Regional Perspective," Tinbergen Institute Discussion Papers, Tinbergen Institute 11-116/3, Tinbergen Institute.
  4. Booth, Alison L & Coles, Melvyn G, 2007. "The Impact of Fiscal Policy on Labour Supply and Education in an Economy with Household and Market Production," CEPR Discussion Papers, C.E.P.R. Discussion Papers 6265, C.E.P.R. Discussion Papers.
  5. Booth, Alison L., 2014. "Wage Determination and Imperfect Competition," IZA Discussion Papers 8034, Institute for the Study of Labor (IZA).
  6. Mendolicchio, Concetta & Paolini, Dimitri & Pietra, Tito, 2011. "Investments in education and welfare in a two-sector, random matching economy," IAB Discussion Paper, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany] 201108, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  7. CREMER, Helmuth & PESTIEAU, Pierre & RACIONERO, Mario, . "Unequal wages for equal utilities," CORE Discussion Papers RP, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) -2369, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  8. Andrea Caragliu & Peter Nijkamp, 2011. "Cognitive Capital and Islands of Innovation: The Lucas Growth Model from a Regional Perspective," Tinbergen Institute Discussion Papers, Tinbergen Institute 11-116/3, Tinbergen Institute.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:een:camaaa:2007-07. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Cama Admin).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.