Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/101918
Authors: 
Gavrel, Frédéric
Lebon, Isabelle
Rebière, Thérèse
Year of Publication: 
2014
Series/Report no.: 
IZA Discussion Papers 8341
Abstract: 
The efficiency of educational choices is studied in a search-matching model where individuals face a tradeoff: acquiring formal education or learning while on the job. When their education effort is successful, newcomers directly obtain a high-skill job; otherwise, they begin with a low-skill job, learn-by-doing and then search while on-the-job for a high-skill job. Low-skill firms suffer from hold-up behavior by high-skill firms. The low-skill sector is insufficiently attractive and individuals devote too much effort to formal education. A self-financing tax and subsidy policy restores market efficiency.
Subjects: 
formal education
learning-by-doing
market efficiency
on-the-job search
search unemployment
JEL: 
H21
I20
J21
J64
J68
Document Type: 
Working Paper

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