Skill Formation, Temporary Disadvantage and Elite Education

Per Hjertstrand, Pehr-Johan Norbäck and Lars Persson

No 8612, CESifo Working Paper Series from CESifo

Abstract: Elite skills have become crucial in today’s superstar economy. We develop a multi-period skill-formation model where we show that individuals with temporary disadvantages must exert greater effort to gain access to elite education. This “underdog-incentive effect” implies that “educated underdogs” obtain superior adult skills. We find support for this mechanism in soccer data: players born early in the year dominate youth soccer, but players born late (but not too late) in the year become the superstars. We also show that if young students discount the future “too much”, high requirements to elite education can increase expected life-time welfare for disadvantaged students.

Keywords: skill formation; temporary disadvantage; elite education; soccer; underdog (search for similar items in EconPapers)
JEL-codes: D90 I20 J24 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-edu and nep-lma
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