Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/25281
Authors: 
Walter, Nicole
Xie, Runli
Year of Publication: 
2008
Series/Report no.: 
SFB 649 discussion paper 2008,039
Abstract: 
Empirical observations show that education helps to protect against labor market risks. This is twofold: The higher educated face a higher expected wage income and a lower probability of being unemployed. Although this relationship has been analyzed in the literature broadly, several questions remain to be tackled. This paper contributes to the existing literature by looking at the above mentioned phenomena from a purely theoretic perspective and in a European context. We set up a model with search-and-matching frictions, collective bargaining and monopolistic competition in the product market. Workers are heterogeneous in their human capital level. It is shown that higher human capital increases the wage rate and reduces unemployment risks, which is consistent with empirical observations for European countries.
Subjects: 
Human capital
search frictions
collective bargaining
monopolistic competition
JEL: 
E24
J24
J52
Document Type: 
Working Paper

Files in This Item:
File
Size
526.48 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.