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Investments in education and welfare in a two-sector, random matching economy

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  • Mendolicchio, Concetta

    ()

    (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])

  • Paolini, Dimitri
  • Pietra, Tito

Abstract

"We consider a random matching model where heterogeneous agents choose optimally to invest time and real resources in education. Generically, there is a steady state equilibrium, where some agents, but not all of them, invest. Regular steady state equilibria are constrained inefficient in a strong sense. The Hosios (1990) condition is neither necessary, nor sufficient, for constrained efficiency. We also provide restrictions on the fundamentals sufficient to guarantee that equilibria are characterized by overeducation (or undereducation), present some results on their comparative statics properties, and discuss the nature of welfare improving policies." (Author's abstract, IAB-Doku) ((en))

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Paper provided by Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany] in its series IAB Discussion Paper with number 201108.

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Length: 40 pages
Date of creation: 07 Mar 2011
Date of revision:
Publication status: published in: Journal of Mathematical Economics, Vol. 48, No. 6 (2012), p. 367-385
Handle: RePEc:iab:iabdpa:201108
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Keywords: Humankapital; Bildungsinvestitionen; matching; Arbeitskräfteangebot; Arbeitsmarktmodell; Arbeitsmarktgleichgewicht; Überqualifikation; Unterqualifikation;

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Find related papers by JEL classification:
  • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
  • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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Cited by:

  1. Zabel, Cordula, 2011. "Lone mothers' participation in labor market programs for means-tested benefit recipients in Germany," IAB Discussion Paper 201114, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  2. Engelmann, Sabine, 2011. "Trade liberalisation, technical change and skill-specific unemployment," IAB Discussion Paper 201119, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  3. Heyer, Gerd & Koch, Susanne & Stephan, Gesine & Wolff, Joachim, 2012. "Evaluation der aktiven Arbeitsmarktpolitik: Ein Sachstandsbericht für die Instrumentenreform 2011 (Evaluation of active labor market programs : a summary of recent results for the German program refor," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 45(1), pages 41-62.
  4. Mendolicchio, Concetta & Pietra, Tito, 2014. "On the efficiency properties of the Roy's model under asymmetric information," IAB Discussion Paper 201408, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  5. Osiander, Christopher & Steinke, Joß, 2011. "Street-level bureaucrats in der Arbeitsverwaltung : Dienstleistungsprozesse und reformierte Arbeitsvermittlung aus Sicht der Vermittler," IAB Discussion Paper 201115, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  6. Zapfel, Stefan & Promberger, Markus, 2011. "Gemeinschaft, Gesellschaft und soziale Sicherung : Überlegungen zu Genese und Wandel des modernen Wohlfahrtsstaats," IAB Discussion Paper 201121, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  7. Drasch, Katrin, 2011. "Do changing institutional settings matter? : educational attainment and family related employment interruptions in Germany," IAB Discussion Paper 201113, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

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