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Education Choices and Job Market Characteristics

Qianshuo Liu and Ines Macho-Stadler

No 1379, Working Papers from Barcelona School of Economics

Abstract: We propose a simple three-stage model where heterogeneous schools compete via tuition fees, individuals with the ex-ante unknown ability make their education choices to (eventually) get a diploma and reveal their ability, and finally the job market determines the assignment of workers to firms and the equilibrium wages. In equilibrium, wages in the labor market and schools’ fees and individuals’ school choices are strongly related. We also analyze the effects of the existence of a public school or a subsidy on social welfare.

Keywords: education choices; skills; job market (search for similar items in EconPapers)
JEL-codes: C78 I26 (search for similar items in EconPapers)
Date: 2023-01
New Economics Papers: this item is included in nep-ure
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