Should vocational education be taxed? Lessons from a matching model with generalists and specialists

Ophélie Cerdan () and Bruno Decreuse
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Ophélie Cerdan: GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique

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Abstract: Should education become more vocational or more general? We address this question in two steps. We first build and solve a two-sector matching model with generalists and specialists. Generalists pursue jobs in both sectors; however, they come second in job queues. Specialists seek for jobs in a single sector; they come first in job queues. Self-selection in education type vehicles three main externalities: specialists boost job creation in each sector; generalists improve the efficiency of the matching technology; generalists exacerbate firms' coordination problems. We then calibrate the model on the labor market for upper-secondary graduates in OECD countries. In each country, we match the proportion of specialists and unemployment rates by type of education in 2000. Self-selection is always inefficient: taxing vocational education to reduce the proportion of specialists down to the efficient level could reduce unemployment rates (for upper-secondary graduates) by 1.1 to 1.8 percentage points.

Keywords: Matching frictions; Education; Efficiency; Calibration (search for similar items in EconPapers)
Date: 2011-03-27
New Economics Papers: this item is included in nep-edu and nep-lab
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