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Unemployment benefits, job protection, and the nature of educational investment

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  • Bruno Decreuse

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université - EHESS - École des hautes études en sciences sociales)

  • Pierre Granier

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université - EHESS - École des hautes études en sciences sociales)

Abstract

This paper examines the impact of labor market institutions covering the risk of unemployment on the nature of educational investment. We offer a matching model of unemployment in which individuals of a given education determine the scope (or adaptability) and intensity (or productivity) of their human capital before entering the labor market. Our model features an increasing relationship between match surplus and the return to adaptability skills. This relationship explains why matching frictions promote adaptability skills instead of productivity skills, and why unemployment benefits and job protection create the incentive for productivity skill acquisition.

Suggested Citation

  • Bruno Decreuse & Pierre Granier, 2013. "Unemployment benefits, job protection, and the nature of educational investment," Post-Print hal-01499634, HAL.
  • Handle: RePEc:hal:journl:hal-01499634
    Note: View the original document on HAL open archive server: https://hal-amu.archives-ouvertes.fr/hal-01499634
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    References listed on IDEAS

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    Cited by:

    1. repec:eee:labeco:v:50:y:2018:i:c:p:32-44 is not listed on IDEAS
    2. Belan, Pascal & Chéron, Arnaud, 2014. "Turbulence, training and unemployment," Labour Economics, Elsevier, vol. 27(C), pages 16-29.

    More about this item

    Keywords

    Economie quantitative;

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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