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A microfoundation for adaptability returns to schooling and technological complexity

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  • Ophélie Cerdan

    ()
    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - CNRS : UMR6579)

  • Bruno Decreuse

    ()
    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - CNRS : UMR6579)

  • Pierre Granier

    ()
    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - CNRS : UMR6579)

Abstract

In a frictional environment, technological complexity creates adaptability returns to schooling. This paper provides microfoundations to such an argument, and revisits the impacts of worker heterogeneity and risk aversion. In our model, firms and workers are located on a knowledge space. Education widens the measure of the knowledge subset that the worker embodies, while technological complexity expands the measure of the knowledge subset that is required to operate on the job. We find uncertainty with regard to the type of the future partner motivates schooling, while it inhibits technological complexity. When workers differ in scholastic ability, the welfare of a given group increases with the proportion of workers of this group. Finally, risk aversion motivates a precautionary demand for education, which in turn creates income risk through firms' technological choices.

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Bibliographic Info

Paper provided by HAL in its series Working Papers with number halshs-00490446.

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Date of creation: 08 Jun 2010
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Handle: RePEc:hal:wpaper:halshs-00490446

Note: View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00490446/en/
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Related research

Keywords: Education; Multi-dimensional skills; Frictions; Heterogeneity; Risk aversion;

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