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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Date of creation: Dec 2009
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education; people; O-ring; skill formation; economy; human capital; production function; communities; literacy trap; skills; educational policy; strategy; Literacy; Society;
Other versions of this item:
- Vidya Atal & Kaushik Basu & John Gray & Travis Lee, 2010. "Literacy traps: Society-wide education and individual skill premia," International Journal of Economic Theory, The International Society for Economic Theory, vol. 6(1), pages 137-148.
- 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-12-11 (All new papers)
- NEP-HRM-2009-12-11 (Human Capital & Human Resource Management)
- NEP-LAB-2009-12-11 (Labour Economics)
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