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The Consequences of Being Different: Statistical Discrimination and the School-to-Work Transition

  • Mueller, Barbara

    ()

    (Swiss Federal Institute for Vocational Education and Training)

  • Wolter, Stefan C.

    ()

    (University of Bern)

When information about the true abilities of job-seekers and applicants are hard to get, statistical discrimination by employers can be an efficient strategy in the hiring and wage setting process. But statistical discrimination can induce costs, if labor relations cannot be terminated in the short term and wages are fixed over a certain period. In this paper we use a unique longitudinal survey that follows the PISA 2000 students in their educational and work-life career. We test whether deviance in the PISA test scores from what one would have predicted based on observable characteristics, influences the probability to succeed in the transition from compulsory school into a firm-based apprenticeship and whether it can explain differences of the individual performances during training. Our results suggest that hard-to-get information plays a significant role in the transition, but not always in a symmetric manner.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5474.

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Length: 33 pages
Date of creation: Feb 2011
Date of revision:
Publication status: published as 'The role of hard-to-obtain information on ability for the school-to-work transition' in: Empirical Economics, 2013, [Online First]
Handle: RePEc:iza:izadps:dp5474
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  1. Galindo-Rueda, Fernando, 2003. "Employer Learning and Schooling-Related Statistical Discrimination in Britain," Royal Economic Society Annual Conference 2003 82, Royal Economic Society.
  2. Kathrin Bertschy & M. Alejandra Cattaneo & Stefan C. Wolter, 2009. "PISA and the Transition into the Labour Market," LABOUR, CEIS, vol. 23(s1), pages 111-137, 03.
  3. Wolter, Stefan C. & Ryan, Paul, 2011. "Apprenticeship," Handbook of the Economics of Education, Elsevier.
  4. Bauer, Thomas K. & Haisken-DeNew, John P., 2001. "Employer learning and the returns to schooling," Labour Economics, Elsevier, vol. 8(2), pages 161-180, May.
  5. Brunello, Giorgio, 2009. "The Effect of Economic Downturns on Apprenticeships and Initial Workplace Training: A Review of the Evidence," IZA Discussion Papers 4326, Institute for the Study of Labor (IZA).
  6. Bassanini, Andrea & Booth, Alison L. & Brunello, Giorgio & De Paola, Maria & Leuven, Edwin, 2005. "Workplace Training in Europe," IZA Discussion Papers 1640, Institute for the Study of Labor (IZA).
  7. Samuel Muehlemann & Stefan C. Wolter & Jürg Schweri & Rainer Winkelmann, 2007. "An empirical analysis of the decision to train apprentices," Economics of Education Working Paper Series 0005, University of Zurich, Institute for Strategy and Business Economics (ISU).
  8. Mühlemann, Samuel & Wolter, Stefan C. & Wüest, Adrian, 2009. "Apprenticeship Training and the Business Cycle," IZA Discussion Papers 4460, Institute for the Study of Labor (IZA).
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