Public information, education and welfare
Gianluca Femminis () and
Giulio Piccirilli ()
Additional contact information
Giulio Piccirilli: Universitas Mercatorum
Economia Politica: Journal of Analytical and Institutional Economics, 2020, vol. 37, issue 1, No 6, 137-166
Abstract We study investments in education made by a continuum of individuals under imperfect information on returns. In the model, the wage accruing to single units of human capital is bargained in the labour market. In addition, this wage depends positively on a stochastic fundamental and, negatively, on the aggregate supply of human capital. At the time of investment, any agent observes a public and a private signal of the fundamental. We show that an increase in the precision of the public signal has an ambiguous impact on the expected social welfare. On the one hand, social welfare improves as schooling decisions become closer to those decisions that would be made under perfect information. On the other hand, social welfare deteriorates as externalities and coordination failures become more severe. The key result of our analysis is that an increase in the quality of public information turns out to be welfare improving, unless the distortions on the labour market are particularly strong.
Keywords: Returns to education; Occupational choice; Information processing; Bargaining (search for similar items in EconPapers)
JEL-codes: D62 D83 I26 J24 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
http://link.springer.com/10.1007/s40888-019-00164-6 Abstract (text/html)
Access to the full text of the articles in this series is restricted.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:spr:epolit:v:37:y:2020:i:1:d:10.1007_s40888-019-00164-6
Ordering information: This journal article can be ordered from
Access Statistics for this article
Economia Politica: Journal of Analytical and Institutional Economics is currently edited by Alberto Quadrio Curzio
More articles in Economia Politica: Journal of Analytical and Institutional Economics from Springer, Fondazione Edison
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().