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

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  • Mendolicchio, Concetta

    (Institute for Employment Research (IAB), 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))

Suggested Citation

  • Mendolicchio, Concetta & Paolini, Dimitri & Pietra, Tito, 2011. "Investments in education and welfare in a two-sector, random matching economy," IAB-Discussion Paper 201108, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    • Handle: RePEc:iab:iabdpa:201108
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    Cited by:

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    2. Björn Nilsson, 2019. "The School-to-Work Transition in Developing Countries," Journal of Development Studies, Taylor & Francis Journals, vol. 55(5), pages 745-764, May.
    3. 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].
    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. Concetta Mendolicchio & Dimitri Paolini & Tito Pietra, 2014. "Income Taxes, Subsidies to Education, and Investments in Human Capital," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 16(1), pages 24-47, February.
    6. 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].
    7. 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].
    8. 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].
    9. 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].

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    More about this item

    Keywords

    Bildungsinvestitionen ; Humankapital ; matching ; Arbeitskräfteangebot ; Überqualifikation ; Unterqualifikation ; Arbeitsmarktgleichgewicht ; Arbeitsmarktmodell;
    All these keywords.

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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