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Repeated Selection with Heterogenous Individuals and Relative Age Effects

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  • Dawid, Herbert

    ()
    (University of Bielefeld)

  • Muehlheusser, Gerd

    ()
    (University of Hamburg)

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    Abstract

    In contexts such as education and sports, skill-accumulation of individuals over time crucially depends on the amount of training they receive, which is often allocated on the basis of repeated selection. We analyze optimal selection policies in a model of endogenous skill formation where, apart from their ability to transform training into skills, individuals also differ with respect to relative age. The latter has been identified by recent empirical research as a major determinant for performance differentials within cohorts. We find that the optimal policy is pro-competitive at later selection stages in the sense of selecting the individuals with the higher skill signals. All eventual corrections due to relative age occur at early stages, where selection is either counter-competitive (i.e. individuals with low skill signals are selected) or even avoided at all. Thereby, the induced selection quality is non-monotone in the degree of ex-ante asymmetry due to relative age. Finally, the (empirical) observation of persistent relative age effects does in general not hint at suboptimal selection policies.

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    Bibliographic Info

    Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6478.

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    Length: 41 pages
    Date of creation: Apr 2012
    Date of revision:
    Handle: RePEc:iza:izadps:dp6478

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    Related research

    Keywords: skill formation; human capital; selection; heterogeneity; age effects; training; education;

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    1. Hendrik Jürges & Kerstin Schneider, 2011. "Why Young Boys Stumble: Early Tracking, Age and Gender Bias in the German School System," German Economic Review, Verein für Socialpolitik, vol. 12(4), pages 371-394, November.
    2. Patrick Puhani & Andrea Weber, 2007. "Does the early bird catch the worm?," Empirical Economics, Springer, vol. 32(2), pages 359-386, May.
    3. Flavio Cunha & James J. Heckman & Susanne M. Schennach, 2010. "Estimating the Technology of Cognitive and Noncognitive Skill Formation," Econometrica, Econometric Society, vol. 78(3), pages 883-931, 05.
    4. Maresa Sprietsma, 2010. "Effect of relative age in the first grade of primary school on long-term scholastic results: international comparative evidence using PISA 2003," Education Economics, Taylor & Francis Journals, vol. 18(1), pages 1-32.
    5. E. Feess & Gerd Muehlheusser & M. Walzl, 2008. "Unfair contests," Journal of Economics, Springer, vol. 93(3), pages 267-291, 04.
    6. Kelly Bedard & Elizabeth Dhuey, 2006. "The Persistence of Early Childhood Maturity: International Evidence of Long-Run Age Effects," The Quarterly Journal of Economics, MIT Press, vol. 121(4), pages 1437-1472, November.
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