Booth, Alison L and Coles, Melvyn (2007) A microfoundation for increasing returns in human capital accumulation and the under-participation trap. European Economic Review, 51 (7). pp. 1661-1681. DOI https://doi.org/10.1016/j.euroecorev.2006.12.004
Booth, Alison L and Coles, Melvyn (2007) A microfoundation for increasing returns in human capital accumulation and the under-participation trap. European Economic Review, 51 (7). pp. 1661-1681. DOI https://doi.org/10.1016/j.euroecorev.2006.12.004
Booth, Alison L and Coles, Melvyn (2007) A microfoundation for increasing returns in human capital accumulation and the under-participation trap. European Economic Review, 51 (7). pp. 1661-1681. DOI https://doi.org/10.1016/j.euroecorev.2006.12.004
Abstract
This paper considers educational investment, wages and hours of market work in an imperfectly competitive labour market with heterogeneous workers and home production. It investigates the degree to which there might be both underemployment in the labour market and underinvestment in education. A central insight is that the ex post participation decision of workers endogeneously generates increasing marginal returns to education. Although equilibrium implies underinvestment in education, optimal policy is not to subsidise education. Instead it is to subsidise labour market participation which we argue might be efficiently targeted as state-provided childcare support. © 2007 Elsevier B.V. All rights reserved.
Item Type: | Article |
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Subjects: | H Social Sciences > HB Economic Theory |
Divisions: | Faculty of Social Sciences Faculty of Social Sciences > Economics, Department of |
SWORD Depositor: | Unnamed user with email elements@essex.ac.uk |
Depositing User: | Unnamed user with email elements@essex.ac.uk |
Date Deposited: | 18 Jul 2012 17:49 |
Last Modified: | 23 Oct 2024 04:56 |
URI: | http://repository.essex.ac.uk/id/eprint/3109 |