The timing of education
We study an assignment-with-investment model to highlight a tradeoff between investment in human capital before (ex ante system) and after (ex post system) matching on the labor market. The ex post system is better at coordinating investment within firms whereas the ex ante system is better at reducing mismatches. We further show that the ability to transfer surplus within firms affects mismatches and the relative performance of the two systems. At high degrees of transferability, they are equivalent. But when transferability is very low, the ex post system outperforms the ex ante system, although with moderate transferability the reverse is true. (JEL: I21, I28, J31, J42) (c) 2006 by the European Economic Association.
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|Date of creation:||2006|
|Date of revision:|
|Publication status:||Published in: European Economic Association. Journal (2006)|
|Contact details of provider:|| Postal: CP135, 50, avenue F.D. Roosevelt, 1050 Bruxelles|
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