Education, Qualification and Employment

Vincent Barthelemy and Bruno Decreuse

Annals of Economics and Statistics, 2002, issue 65, 35-54

Abstract: We construct a matching model of both skilled and unskilled unemployment, in which heterogeneous agents have to choose whether to become skilled or not, and how much education (a duration) to acquire. The decentralized economy may exhibit multiple equilibria, of which those exhibiting the highest (lowest) education duration are also those having the largest (smallest) skilled workforce. The private marginal return to education is lower than the social return, while the private return to occupation is higher than the social return. Consequently, we show that the social command may be decentralized through a subsidy to education and a limited access to the schooling sector.

Date: 2002
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Persistent link: https://EconPapers.repec.org/RePEc:adr:anecst:y:2002:i:65:p:35-54

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