IDEAS home Printed from https://ideas.repec.org/p/ags/umedbu/7503.html
   My bibliography  Save this paper

Education, Job Signaling, and Dual Labor Markets in Developing Countries

Author

Listed:
  • Kim, Sunwoong
  • Mohtadi, Hamid

Abstract

An overlapping generational model of educational investment in a dual labor markets is presented in which education serves both as a screening device and as investment in human capital. Labor market dualism arises not only via the conventional technology (productivity) differential between a primary and a secondary sector, but also by a higher than a labor market clearing wage in the primary sector, to insure no shirking by the workers (an element shared with the efficiency wage theories). The important determinants of the workers' educational investment decision are the degree of discipline in the labor market and the cost of education. Among the three most commonly discussed educational policies of maximizing the number of the educated, maximizing the primary sector employment and maximizing social welfare, the last one, i.e., the most efficient one, leads to a lower level of education subsidy by the government.

Suggested Citation

  • Kim, Sunwoong & Mohtadi, Hamid, 1992. "Education, Job Signaling, and Dual Labor Markets in Developing Countries," Bulletins 7503, University of Minnesota, Economic Development Center.
    • Handle: RePEc:ags:umedbu:7503
    DOI: 10.22004/ag.econ.7503
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/7503/files/edc92-01.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.7503?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
    ---><---

    References listed on IDEAS

    as
    1. Georg Noldeke & Eric van Damme, 1990. "Signalling in a Dynamic Labour Market," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 57(1), pages 1-23.
    2. Salop, Steven C, 1979. "A Model of the Natural Rate of Unemployment," American Economic Review, American Economic Association, vol. 69(1), pages 117-125, March.
    3. Dickens, William T & Lang, Kevin, 1985. "A Test of Dual Labor Market Theory," American Economic Review, American Economic Association, vol. 75(4), pages 792-805, September.
    4. In-Koo Cho & David M. Kreps, 1987. "Signaling Games and Stable Equilibria," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 102(2), pages 179-221.
    5. Banks, Jeffrey S & Sobel, Joel, 1987. "Equilibrium Selection in Signaling Games," Econometrica, Econometric Society, vol. 55(3), pages 647-661, May.
    6. Fields, Gary S., 1975. "Rural-urban migration, urban unemployment and underemployment, and job-search activity in LDCs," Journal of Development Economics, Elsevier, vol. 2(2), pages 165-187, June.
    7. Fields, Gary S., 1974. "The allocation of resources to education in less developed countries," Journal of Public Economics, Elsevier, vol. 3(2), pages 133-143, May.
    8. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-444, June.
    9. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-142, March.
    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. Simonetta Longhi & Peter Nijkamp & Jacques Poot, 2006. "Spatial Heterogeneity And The Wage Curve Revisited," Journal of Regional Science, Wiley Blackwell, vol. 46(4), pages 707-731, October.
    2. Dilmé, Francesc, 2019. "Dynamic quality signaling with hidden actions," Games and Economic Behavior, Elsevier, vol. 113(C), pages 116-136.
    3. Anne Perrot & André Zylberberg, 1989. "Salaire d'efficience et dualisme du marché du travail," Revue Économique, Programme National Persée, vol. 40(1), pages 5-20.
    4. Kremer, Ilan & Skrzypacz, Andrzej, 2007. "Dynamic signaling and market breakdown," Journal of Economic Theory, Elsevier, vol. 133(1), pages 58-82, March.
    5. Bargain, Olivier & Etienne, Audrey & Melly, Blaise, 2021. "Informal pay gaps in good and bad times: Evidence from Russia," Journal of Comparative Economics, Elsevier, vol. 49(3), pages 693-714.
    6. Boeri, Tito & Brücker, Herbert, 2005. "Migration, Co-ordination Failures and EU Enlargement," IZA Discussion Papers 1600, Institute of Labor Economics (IZA).
    7. Adama Zerbo, 2006. "Marché du travail urbain et pauvreté en Afrique subsaharienne : un modèle d’analyse," Documents de travail 129, Groupe d'Economie du Développement de l'Université Montesquieu Bordeaux IV.
    8. Oyvat, Cem, 2016. "Agrarian Structures, Urbanization, and Inequality," World Development, Elsevier, vol. 83(C), pages 207-230.
    9. Peter Nijkamp & Jacques Poot, 2005. "The Last Word on the Wage Curve?," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pages 421-450, July.
    10. Nicholas Barton & Tessa Bold & Justin Sandefur, 2017. "Measuring Rents from Public Employment: Regression Discontinuity Evidence from Kenya - Working Paper 457," Working Papers 457, Center for Global Development.
    11. Brendan Daley & Brett Green, 2012. "Waiting for News in the Market for Lemons," Econometrica, Econometric Society, vol. 80(4), pages 1433-1504, July.
    12. Almeida, Rita & Carneiro, Pedro, 2008. "Mandated benefits, employment, and inequality in a dual economy," Social Protection Discussion Papers and Notes 45051, The World Bank.
    13. Baas, Timo & Brücker, Herbert, 2012. "The macroeconomic consequences of migration diversion: Evidence for Germany and the UK," Structural Change and Economic Dynamics, Elsevier, vol. 23(2), pages 180-194.
    14. Sonia R Bhalotra, 1998. "Investigating Rationality in Wage-Setting," STICERD - Development Economics Papers - From 2008 this series has been superseded by Economic Organisation and Public Policy Discussion Papers 10, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    15. Hooper, Louise, 2008. "Paying for performance: Uncertainty, asymmetric information and the payment model," Research in Transportation Economics, Elsevier, vol. 22(1), pages 157-163, January.
    16. Gordon Menzies, 2018. "A Synthesis of the Lewis Development Model and Neoclassical Trade Models," Working Paper Series 46, Economics Discipline Group, UTS Business School, University of Technology, Sydney.
    17. Bold, Tessa & Barton, Nicholas & Sandefur, Justin, 2017. "Measuring Rents from Public Employment: Regression discontinuity evidence from Kenya," CEPR Discussion Papers 12105, C.E.P.R. Discussion Papers.
    18. Azam, Jean-Paul & Ris, Catherine, 2001. "Rent-sharing, hold-up, and manufacturing wages in Cote d'Ivoire," Policy Research Working Paper Series 2600, The World Bank.
    19. Starkov, Egor, 2023. "Only time will tell: Credible dynamic signaling," Journal of Mathematical Economics, Elsevier, vol. 109(C).
    20. Therese REBIERE, 2011. "Informal labor market and access to education in developing economies," EcoMod2011 2861, EcoMod.

    More about this item

    Keywords

    Labor and Human Capital;

    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:ags:umedbu:7503. 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: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/dcumnus.html .

    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.