IDEAS home Printed from https://ideas.repec.org/a/ucp/jlabec/v17y1999i4p694-723.html

Education, Ranking, and Competition for Jobs

Author

Listed:
  • Moen, Espen R

Abstract

I study workers' incentives to invest in general human capital (education) in the presence of search-induced unemployment. Workers queue for jobs, and firms prefer to hire the most productive applicants because of rent sharing. As a result, an unemployed worker's ranking relative to other job seekers will influence his job-finding rate. This creates a "rat race," where workers invest in education partly in order to achieve a better ranking. In equilibrium, identical workers may have incentives to diversify in terms of education, and the investments in education may exceed the socially optimal level. Copyright 1999 by University of Chicago Press.

Suggested Citation

  • Moen, Espen R, 1999. "Education, Ranking, and Competition for Jobs," Journal of Labor Economics, University of Chicago Press, vol. 17(4), pages 694-723, October.
    • Handle: RePEc:ucp:jlabec:v:17:y:1999:i:4:p:694-723
    DOI: 10.1086/209936
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1086/209936
    File Function: full text
    Download Restriction: Access to full text is restricted to subscribers. See http://www.journals.uchicago.edu/JOLE for details.
    File URL: https://libkey.io/10.1086/209936?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Giuseppe Bertola & Ricardo J. Caballero, 1994. "Cross-Sectional Efficiency and Labour Hoarding in a Matching Model of Unemployment," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 61(3), pages 435-456.
    2. Pissarides, Christopher A, 1985. "Short-run Equilibrium Dynamics of Unemployment Vacancies, and Real Wages," American Economic Review, American Economic Association, vol. 75(4), pages 676-690, September.
    3. MacLeod, W Bentley & Malcomson, James M, 1993. "Investments, Holdup, and the Form of Market Contracts," American Economic Review, American Economic Association, vol. 83(4), pages 811-837, September.
    4. George Akerlof, 1976. "The Economics of Caste and of the Rat Race and Other Woeful Tales," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 90(4), pages 599-617.
    5. Arthur J. Hosios, 1990. "On The Efficiency of Matching and Related Models of Search and Unemployment," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 57(2), pages 279-298.
    6. Dale T. Mortensen & Christopher A. Pissarides, 1994. "Job Creation and Job Destruction in the Theory of Unemployment," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 61(3), pages 397-415.
    7. Hall, Robert E., 1979. "A theory of the natural unemployment rate and the duration of employment," Journal of Monetary Economics, Elsevier, vol. 5(2), pages 153-169, April.
    8. Daron Acemoglu, 1996. "A Microfoundation for Social Increasing Returns in Human Capital Accumulation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(3), pages 779-804.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Arnaud Chéron & Jean‐Olivier Hairault & François Langot, 2011. "Age‐Dependent Employment Protection," Economic Journal, Royal Economic Society, vol. 121(557), pages 1477-1504, December.
    2. Mortensen, Dale T & Pissarides, Christopher, 2001. "Taxes, subsidies and equilibrium labor market outcomes," LSE Research Online Documents on Economics 2075, London School of Economics and Political Science, LSE Library.
    3. Strand, Jon, 2002. "Wage bargaining and turnover costs with heterogenous labor and perfect history screening," European Economic Review, Elsevier, vol. 46(7), pages 1209-1227, July.
    4. Richard Rogerson & Robert Shimer & Randall Wright, 2005. "Search-Theoretic Models of the Labor Market: A Survey," Journal of Economic Literature, American Economic Association, vol. 43(4), pages 959-988, December.
    5. Strand, Jon, 2000. "Wage bargaining and turnover costs with heterogeneous labor and asymmetric information1," Labour Economics, Elsevier, vol. 7(1), pages 95-116, January.
    6. Giulio Fella, 2014. "Investment in General Training with Consensual Layoffs," Working Papers 418, Queen Mary University of London, School of Economics and Finance.
    7. repec:eee:labchp:v:3:y:1999:i:pb:p:2291-2372 is not listed on IDEAS
    8. Lisi, Gaetano, 2013. "The Benchmark Macroeconomic Models of the Labour Market," MPRA Paper 62318, University Library of Munich, Germany.
    9. Richard Rogerson, 1997. "Theory Ahead of Language in the Economics of Unemployment," Journal of Economic Perspectives, American Economic Association, vol. 11(1), pages 73-92, Winter.
    10. repec:eee:labchp:v:3:y:1999:i:pb:p:2567-2627 is not listed on IDEAS
    11. Bandopadhyay, Titas Kumar, 2014. "Economic Reforms, Frictional Unemployment and Wage Inequality-----A General Equilibrium Analysis," MPRA Paper 59819, University Library of Munich, Germany.
    12. Lisi, Gaetano, 2010. "Introduzione allo studio dei modelli di "matching" del mercato del lavoro [Introduction to the study of matching models of unemployment]," MPRA Paper 22735, University Library of Munich, Germany.
    13. Toshihiko Mukoyama, 2019. "Heterogeneous Jobs and the Aggregate Labour Market," The Japanese Economic Review, Springer, vol. 70(1), pages 30-50, March.
    14. Tesfatsion, Leigh, 1998. "Ex Ante Capacity Effects in Evolutionary Labor Markets with Adaptive Search," ISU General Staff Papers 199810010700001046, Iowa State University, Department of Economics.
    15. Hashimoto, Ken-ichi & Ono, Yoshiyasu & Schlegl, Matthias, 2023. "Structural unemployment, underemployment, and secular stagnation," Journal of Economic Theory, Elsevier, vol. 209(C).
    16. Fella Giulio, 2012. "Matching, Wage Rigidities and Efficient Severance Pay," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 12(1), pages 1-35, December.
    17. Leena Rudanko, 2008. "Aggregate and Idiosyncratic Risk in a Frictional Labor Market," Boston University - Department of Economics - Working Papers Series wp2008-009, Boston University - Department of Economics.
    18. Jackson, Paul, 2023. "Equilibrium underemployment," Labour Economics, Elsevier, vol. 81(C).
    19. Petrosky-Nadeau, Nicolas & Wasmer, Etienne, 2015. "Macroeconomic dynamics in a model of goods, labor, and credit market frictions," Journal of Monetary Economics, Elsevier, vol. 72(C), pages 97-113.
    20. Gibson, John & Heutel, Garth, 2023. "Pollution and labor market search externalities over the business cycle," Journal of Economic Dynamics and Control, Elsevier, vol. 151(C).
    21. Ioana Marinescu & Ronald Wolthoff, 2020. "Opening the Black Box of the Matching Function: The Power of Words," Journal of Labor Economics, University of Chicago Press, vol. 38(2), pages 535-568.
    22. André Kurmann, 2009. "Holdups and Overinvestment in Physical Capital Markets," Cahiers de recherche 0904, CIRPEE.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucp:jlabec:v:17:y:1999:i:4:p:694-723. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Journals Division (email available below). General contact details of provider: https://www.journals.uchicago.edu/JOLE .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.