Matching frictions and the divide of schooling investment between general and specific skills
AbstractThis paper examines the impact of labor market frictions and institutions on the divide of schooling investment between general and specific skills. We offer a simple matching model of unemployment in which individuals determine the scope and intensity of their skills. In partial equilibrium, we show that the severity of market frictions distorts the schooling allocation towards more general skills. Then, we endogenize job creation and argue that changes in labor market institutions may well originate a non-monotonous relationship between unemployment and the divide of skills between specific and general human capital. We also investigate more carefully the impacts of unemployment compensation, minimum wage and firing costs. We suggest that unemployment compensation has an ambiguous impact on the skill divide, while minimum wage and firing costs are detrimental to general skill acquisition.
Download InfoIf 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.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 6948.
Date of creation: Dec 2007
Date of revision:
Matching frictions; education; general and specific skills; labour market institutions;
Find related papers by JEL classification:
- I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-02-09 (All new papers)
- NEP-DGE-2008-02-09 (Dynamic General Equilibrium)
- NEP-EDU-2008-02-09 (Education)
- NEP-HRM-2008-02-09 (Human Capital & Human Resource Management)
- NEP-LAB-2008-02-09 (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.:
- Laing, Derek & Palivos, Theodore & Wang, Ping, 1995. "Learning, Matching and Growth," Review of Economic Studies, Wiley Blackwell, vol. 62(1), pages 115-29, January.
- Cahuc, P. & Michel, P., 1992.
"Minimum Wage, Unemployment and Growth,"
Papiers d'Economie MathÃÂ©matique et Applications
92.35, UniversitÃ© PanthÃ©on-Sorbonne (Paris 1).
- Booth, Alison L. & Chatterji, Monojit, 1996.
"Unions and efficient training,"
ISER Working Paper Series
96-13, Institute for Social and Economic Research.
- Lisi, Gaetano & Pugno, Maurizio, 2011.
"The Underground Economy in a Matching Model of Endogenous Growth,"
31312, University Library of Munich, Germany.
- Gaetano Lisi & Maurizio Pugno, 2010. "The Underground Economy in a Matching Model of Endogenous Growth," Working Papers 2010-07, Universita' di Cassino, Dipartimento di Scienze Economiche.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.