Endogenous Fluctuations in the Demand of Education
Enrolment rates to higher education reveal quite large variation over time which cannot be explained by productivity shocks alone. We develop a human capital investment model in an overlapping generations framework that features endogenous fluctuations in the demand for education. Agents are heterogeneous in their beliefs about future wage differentials. An evolutionary competition between the heterogeneous beliefs determines the fraction of the newborn generation having a certain belief. Costly access to information on the returns to education induces agents to use potentially destabilizing backward looking prediction rules. Only if previous generations experience regret about their human capital investment decisions, agents will choose a more sophisticated prediction rule that dampens the cycle. Access to information becomes key for stable flows to higher education. - expectations ; human capital investment ; endogenous fluctuations ; intergenerational spill-overs evolutionary dynamics ; bifurcation analysis
(This abstract was borrowed from another version of this item.)
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
|Date of creation:||2001|
|Date of revision:|
|Contact details of provider:|| Postal: Dept. of Economics and Econometrics, Universiteit van Amsterdam, Roetersstraat 11, NL - 1018 WB Amsterdam, The Netherlands|
Phone: + 31 20 525 52 58
Fax: + 31 20 525 52 83
Web page: http://www.fee.uva.nl/cendef/
More information through EDIRC
References listed on IDEAS
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.:
- Brock, W.A. & Hommes, C.H., 1996.
"A Rational Route to Randomness,"
9530r, Wisconsin Madison - Social Systems.
- Brunello, Giorgio & Lucifora, Claudio & Winter-Ebmer, Rudolf, 2001.
"The Wage Expectations of European College Students,"
CEPR Discussion Papers
2817, C.E.P.R. Discussion Papers.
- Brunello, Giorgio & Lucifora, Claudio & Winter-Ebmer, Rudolf, 2001. "The Wage Expectations of European College Students," IZA Discussion Papers 299, Institute for the Study of Labor (IZA).
- Giorgio Brunello & Claudio Lucifora & Rudolf Winter-Ebmer, 2001. "The wage expectations of European college students," Economics working papers 2001-08, Department of Economics, Johannes Kepler University Linz, Austria.
- Droste, E. & Hommes, C.H. & Tuinstra, J., 1999.
"Endogenous Fluctuations under Evolutionary Pressure in Cournot Competition,"
CeNDEF Working Papers
99-04, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
- Droste, Edward & Hommes, Cars & Tuinstra, Jan, 2002. "Endogenous fluctuations under evolutionary pressure in Cournot competition," Games and Economic Behavior, Elsevier, vol. 40(2), pages 232-269, August.
- Freeman, Richard B, 1975. "Supply and Salary Adjustments to the Changing Science Manpower Market: Physics, 1948-1973," American Economic Review, American Economic Association, vol. 65(1), pages 27-39, March.
- Brock, W.A. & Hommes, C.H., 1996.
"Hetergeneous Beliefs and Routes to Chaos in a Simple Asset Pricing Model,"
9621, Wisconsin Madison - Social Systems.
- Brock, William A. & Hommes, Cars H., 1998. "Heterogeneous beliefs and routes to chaos in a simple asset pricing model," Journal of Economic Dynamics and Control, Elsevier, vol. 22(8-9), pages 1235-1274, August.
- Lux, Thomas, 1998. "The socio-economic dynamics of speculative markets: interacting agents, chaos, and the fat tails of return distributions," Journal of Economic Behavior & Organization, Elsevier, vol. 33(2), pages 143-165, January.
- Andrea Gaunersdorfer & Cars Hommes & Florian O.O. Wagener, 2001.
"Bifurcation Routes to Volatility Clustering,"
Tinbergen Institute Discussion Papers
01-015/1, Tinbergen Institute.
- Freeman, Richard B, 1975. "Legal "Cobwebs": A Recursive Model of the Market for New Lawyers," The Review of Economics and Statistics, MIT Press, vol. 57(2), pages 171-79, May.
- Gary S. Becker, 1975. "Human Capital: A Theoretical and Empirical Analysis, with Special Reference to Education, Second Edition," NBER Books, National Bureau of Economic Research, Inc, number beck75-1, 08.
- Orazem, Peter & Tesfatsion, Leigh S., 1997.
"Macrodynamic Implications of Income Transfer Policies for Human Capital Investment and School Effort,"
Staff General Research Papers Archive
1683, Iowa State University, Department of Economics.
- Orazem, Peter & Tesfatsion, Leigh, 1997. "Macrodynamic Implications of Income-Transfer Policies for Human Capital Investment and School Effort," Journal of Economic Growth, Springer, vol. 2(3), pages 305-29, September.
- Carl Chiarella, 1992. "The Dynamics of Speculative Behaviour," Working Paper Series 13, Finance Discipline Group, UTS Business School, University of Technology, Sydney.
- Duchesne, I. & Nonneman, W., 1998. "The Demand for Higher Education in Belgium," Economics of Education Review, Elsevier, vol. 17(2), pages 211-218, April.
- Bala, Venkatesh & Sorger, Gerhard, 2001. "A Spatial-Temporal Model of Human Capital Accumulation," Journal of Economic Theory, Elsevier, vol. 96(1-2), pages 153-179, January.
- Julian R. Betts, 1996. "What Do Students Know about Wages? Evidence from a Survey of Undergraduates," Journal of Human Resources, University of Wisconsin Press, vol. 31(1), pages 27-56.
- Emilio Barucci, 1999. "Heterogeneous beliefs and learning in forward looking economic models," Journal of Evolutionary Economics, Springer, vol. 9(4), pages 453-464.
- Zarkin, Gary A., 1983. "Cobweb versus rational expectations models : Lessons from the market for public school teachers," Economics Letters, Elsevier, vol. 13(1), pages 87-95.
- de la Croix, David, 1996.
"Economic development and convergence clubs: the role of inherited tastes and human capital,"
Discussion Papers (IRES - Institut de Recherches Economiques et Sociales)
1996024, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES), revised 00 Oct 1996.
- de la Croix, David, 2001. "Growth dynamics and education spending: The role of inherited tastes and abilities," European Economic Review, Elsevier, vol. 45(8), pages 1415-1438, August.
- Gary A. Zarkin, 1985. "Occupational Choice: An Application to the Market for Public School Teachers," The Quarterly Journal of Economics, Oxford University Press, vol. 100(2), pages 409-446.
- Michael Kopel & Herbert Dawid, 1998. "On economic applications of the genetic algorithm: a model of the cobweb type," Journal of Evolutionary Economics, Springer, vol. 8(3), pages 297-315.
- Bala, Venkatesh & Sorger, Gerhard, 1998. "The evolution of human capital in an interacting agent economy," Journal of Economic Behavior & Organization, Elsevier, vol. 36(1), pages 85-108, July.
- Richard B. Freeman, 1976. "A Cobweb Model of the Supply and Starting Salary of New Engineers," ILR Review, Cornell University, ILR School, vol. 29(2), pages 236-248, January.
- David Card & Thomas Lemieux, 2001.
"Dropout and Enrollment Trends in the Postwar Period: What Went Wrong in the 1970s?,"
in: Risky Behavior among Youths: An Economic Analysis, pages 439-482
National Bureau of Economic Research, Inc.
- David Card & Thomas Lemieux, 2000. "Dropout and Enrollment Trends in the Post-War Period: What Went Wrong in the 1970s?," NBER Working Papers 7658, National Bureau of Economic Research, Inc.
- Robert H. Topel, 1997. "Factor Proportions and Relative Wages: The Supply-Side Determinants of Wage Inequality," Journal of Economic Perspectives, American Economic Association, vol. 11(2), pages 55-74, Spring.
- Arifovic, Jasmina, 1994. "Genetic algorithm learning and the cobweb model," Journal of Economic Dynamics and Control, Elsevier, vol. 18(1), pages 3-28, January.
- Quinn, Robert & Price, Jamie, 1998. "The demand for medical education: an augmented human capital approach," Economics of Education Review, Elsevier, vol. 17(3), pages 337-347, June.
- Borghans, Lex & De Grip, Andries & Heijke, Hans, 1996. "Labor market information and the choice of vocational specialization," Economics of Education Review, Elsevier, vol. 15(1), pages 59-74, February.
- Charles T. Clotfelter & Michael Rothschild, 1993. "Introduction to "Studies of Supply and Demand in Higher Education"," NBER Chapters, in: Studies of Supply and Demand in Higher Education, pages 1-10 National Bureau of Economic Research, Inc.
- Siow, Aloysius, 1984. "Occupational Choice under Uncertainty," Econometrica, Econometric Society, vol. 52(3), pages 631-45, May.
When requesting a correction, please mention this item's handle: RePEc:ams:ndfwpp:01-04. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Cees C.G. Diks)
If references are entirely missing, you can add them using this form.