Investments in education and welfare in a two-sector, random matching economy

Mendolicchio, Concetta ; Paolini, Dimitri ; Pietra, Tito (2010) Investments in education and welfare in a two-sector, random matching economy. Bologna: Dipartimento di Scienze economiche DSE, p. 39. DOI 10.6092/unibo/amsacta/4539. In: Quaderni - Working Paper DSE (702). ISSN 2282-6483.
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Abstract

We consider a random matching model where heterogeneous agents choose optimally to invest time and real resources in education. Generically, there is a steady state equilibrium, where some agents, but not all of them, invest. Regular steady state equilibria are constrained inefficient in a strong sense. The Hosios (1990) condition is neither necessary, nor sufficient, for constrained efficiency. We also provide restrictions on the fundamentals sufficient to guarantee that equilibria are characterized by overeducation (or undereducation), present some results on their comparative statics properties, and discuss the nature of welfare improving policies.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Mendolicchio, Concetta
Paolini, Dimitri
Pietra, Tito
Subjects
ISSN
2282-6483
DOI
Deposit date
04 Feb 2016 11:39
Last modified
04 Feb 2016 11:40
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