EDUCATION AND EMPLOYMENT: DO HIRING COSTS MATTER?

Raies Asma and Mohamed Ben Mimoun

Journal of Academic Research in Economics, 2012, vol. 4, issue 3 (December), 310-316

Abstract: A belief that a better-trained workforce will enhance employability of workers at the individual level and thus reduce unemployment at the aggregate level is commonly held. Nevertheless, in reality and especially in developing countries, unemployment rates strongly hit the most educated population. Contrarily to the traditional literature which takes hiring cost as exogenous, we assume that hiring cost is endogenous and proportional to the worker s skill level. By doing so, our model displays a positive relationship linking education and unemployment which agrees with reality.

Keywords: Employment; Educaation; hiring cost. (search for similar items in EconPapers)
JEL-codes: I25 J23 J24 (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:shc:jaresh:v:4:y:2012:i:3:p:310-316

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