Firm-Level Social Returns to Education

Pedro Martins

No 1382, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Do workers benefit from the education of their co-workers? This question is examined first by introducing a model of on-the-job schooling, which argues that educated workers may transfer part of their general skills to uneducated workers and that this spillover is affected by the degrees of non-excludability, irreversibility and generality of those skills. We then conduct an empirical analysis drawing on a matched panel of Portuguese firms and their workers. Schooling endogeneity is tackled by considering firm fixed effects and instruments based on schooling lags and the lagged share of retirement-age workers. We find evidence of large firm-level social returns (ranging between 14% and 23% – and thus exceeding standard estimates of private returns) and of significant returns accruing to less educated workers but not to their more educated colleagues.

Keywords: wages; endogenous growth; matched employer-employee data; education; spillovers (search for similar items in EconPapers)
JEL-codes: I20 J24 J31 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2004-11
New Economics Papers: this item is included in nep-edu
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Citations: View citations in EconPapers (35)

Published - published in: Journal of Population Economics, 2010, 23(2), 539-558

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Journal Article: Firm-level social returns to education (2010)
Working Paper: Firm-Level Social Returns to Education (2008)
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