Labor Market Search and Schooling Investment

Christopher Flinn and Joseph Mullins

No 295, Carlo Alberto Notebooks from Collegio Carlo Alberto

Abstract: We generalize the standard search, matching, and bargaining framework to allow individuals to acquire productivity-enhancing schooling prior to labor market entry. As is wellknown, search frictions and weakness in bargaining position contribute to under-investment from an efficiency perspective. In order to evaluate the sensitivity of schooling investments to “hold up,” the model is estimated using Current Population Survey data. We focus on the impact of bargaining power on schooling investment, and find that the effects are large in the partial equilibrium version of the model. However, large increases in bargaining power in the general equilibrium version of the model choke off firm vacancy creation and actually reduce the level of schooling investment.

Keywords: Labor market search; schooling choice; hold-up; Nash bargaining. (search for similar items in EconPapers)
JEL-codes: J24 J3 J64 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2013
New Economics Papers: this item is included in nep-dge, nep-lab and nep-lma
References: View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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Related works:
Journal Article: LABOR MARKET SEARCH AND SCHOOLING INVESTMENT (2015)
Working Paper: Labor Market Search and Schooling Investment (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:cca:wpaper:295

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