A simple model of globalization, schooling and skill acquisition

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. We develop a model of schooling and skill acquisition, highlighting informational asymmetries that distort the incentives to educate. A key feature of our model is that education acts simultaneously as a signaling device and as a method for workers to enhance their productivity. We show that when firms can only imperfectly screen workers, the result is an economy in which too many workers purchase schooling and too few workers devote sufficient effort to their coursework to qualify for the high skill labor pool. We then examine how greater openness to international markets alters the skill mix of the domestic workforce and show that greater openness usually eases one labor market distortion while making the other distortion worse. Globalization impacts educational behavior and labor market outcomes differently as the extent of firms engaged in international markets varies, and affects wage inequality both within and across educational groups. Terms of use: Documents in

Trade, educational costs, and skill acquisition

“…ENDNOTES 1 The empirical evidence on this issue is mixed. See Atkin (2016) for Mexico, Edmonds, Pavcnik, and Topalova (2010) for India, Hickman and Olney (2011) for the US, Li (2018) and Lin and Long (2018) Davidson and Sly (2014) is another paper on trade and education in a non-traditional H-O framework. They model education both as a signaling device and as a method to enhance worker's productivity.…”

“… Davidson and Sly () is another paper on trade and education in a non‐traditional H‐O framework. They model education both as a signaling device and as a method to enhance worker's productivity.…”

Trade‐induced Skill Polarization

“…The third main contribution of this paper is getting granular to a specific channel through which exogenous trade shocks can affect skill distribution: wage‐gap changes. Although several papers (e.g., Danziger ; Davidson and Sly ; Greenland and Lopresti ; Li ) investigate how the average skill level responds to trade shocks, none examines the channel of wage‐gap changes through which trade affects skill acquisition. For example, Atkin () studies how the onset of North American Free Trade Agreement (NAFTA), which resulted in new jobs in the Mexican manufacturing sector, affected the drop‐out rates of students who lived in municipalities that were more exposed to trade shocks.…”

Formal Lifelong E-Learning for Employability and Job Stability During Turbulent Times in Spain

“…Furthermore, the relationship between level of education and work are not always direct, both from a standpoint of overqualification existing in society (Leuven & Oosterbeek, 2011) and investment in education (Davidson & Sly, 2014). As expected, new technologies and their associated processes are changing current and future jobs (Frey & Osborne, 2017;Hodgson, 2016).…”