Human capital formation in an open economy with increasing wage differentials
Several developed countries are witnessing a trend towards an increasing gap in the earnings between skilled and unskilled workers. Though it is widely recognised that human capital formation programs through education and training should be strengthened in the presence of increasing wage differentials, it seems that this is not currently occurring to a satisfactory extent. We show an example where technology and terms of trade shocks that enhance the wage differential between high and low-skilled labour aggravate the underinvestment in public education arising from majority voting, thus leading to an undesirable outcome, both in terms of efficiency and equity.
|Date of creation:||01 Jan 1997|
|Contact details of provider:|| Postal: Voie du Roman Pays 34, 1348 Louvain-la-Neuve (Belgium)|
Fax: +32 10474304
Web page: http://www.uclouvain.be/core
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:cor:louvco:1997007. 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: (Alain GILLIS)
If references are entirely missing, you can add them using this form.