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Firm-level social returns to education

  • Pedro Martins

    ()

  • Jim Jin

Do workers benefit from the education of their co-workers? This question is examined first by introducing a model of on-the-job schooling, which argues that educated workers may transfer part of their general skills to uneducated workers and that this spillover is affected by the degrees of non-excludability, irreversibility and generality of those skills. We then conduct an empirical analysis drawing on a matched panel of Portuguese firms and their workers. Schooling endogeneity is tackled by considering firm fixed effects and instruments based on schooling lags and the lagged share of retirement-age workers. We find evidence of large firm-level social returns (ranging between 14% and 23% – and thus exceeding standard estimates of private returns) and of significant returns accruing to less educated workers but not to their more educated colleagues.

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Article provided by Springer in its journal Journal of Population Economics.

Volume (Year): 23 (2010)
Issue (Month): 2 (March)
Pages: 539-558

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Handle: RePEc:spr:jopoec:v:23:y:2010:i:2:p:539-558
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