Search equilibrium, production parameters and social returns to education
Subtitle: theory and estimation
By: by Christian Holzner, Andrey Launov.
Contributors: Launov, Andrey.
Series: Discussion paper ;; no. 1904; Discussion paper (Forschungsinstitut zur Zukunft der Arbeit : Online) ;; no. 1904
Publisher: IZA
Published: 2005
Place of publication: Bonn, Germany
Language: eng
Format: Electronic resource
Subjects: Production functions (Economic theory); Equilibrium (Economics)
Description: "We introduce different skill groups and production functions into the Burdett-Mortensen equilibrium search model. Supermodularity in the production process leads to a positive intrafirm wage correlation between skill groups. Theory implies that increasing returns to scale can lead to a unimodal earnings density with a decreasing right tail even in the absence of productivity dispersion. Our empirical results indicate economy-wide increasing returns to scale. We use the structural estimates of the production parameters to investigate whether private returns to education equal social returns. Our estimates suggest a positive welfare effect from increasing the share of medium-skilled agents in the workforce"--Forschungsinstitut zur Zukunft der Arbeit web site.
Notes: Also available in print.
Includes bibliographical references.
Title from PDF file as viewed on 12/21/2005.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.