Should vocational education be taxed? Lessons from a matching model with generalists and specialists
AbstractShould education become more vocational or more general? We address this question in two steps. We first build and solve a two-sector matching model with generalists and specialists. Generalists pursue jobs in both sectors; however, they come second in job queues. Specialists seek for jobs in a single sector; they come first in job queues. Self-selection in education type vehicles three main externalities: specialists boost job creation in each sector; generalists improve the efficiency of the matching technology; generalists exacerbate firms' coordination problems. We then calibrate the model on the labor market for upper-secondary graduates in OECD countries. In each country, we match the proportion of specialists and unemployment rates by type of education in 2000. Self-selection is always inefficient: taxing vocational education to reduce the proportion of specialists down to the efficient level could reduce unemployment rates (for upper-secondary graduates) by 1.1 to 1.8 percentage points.
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Date of creation: 27 Mar 2011
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Matching frictions; Education; Efficiency; Calibration;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-04-09 (All new papers)
- NEP-EDU-2011-04-09 (Education)
- NEP-LAB-2011-04-09 (Labour Economics)
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.:
- Albrecht, James W. & Gautier, Pieter A. & Vroman, Susan B., 2003.
"Matching with multiple applications,"
Elsevier, vol. 78(1), pages 67-70, January.
- Smits, W., 2007. "Industry-specific or generic skills? Conflicting interests of firms and workers," Labour Economics, Elsevier, vol. 14(3), pages 653-663, June.
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