The Timing of Education

Thomas Gall, Patrick Legros and Andrew Newman

Journal of the European Economic Association, 2006, vol. 4, issue 2-3, 427-435

Abstract: 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.

Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:tpr:jeurec:v:4:y:2006:i:2-3:p:427-435

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