The gender gap of returns on education across West European countries

"We study the returns on education in Europe in a comparative perspective. We extend the model of de la Fuente [(2003). Human Capital in a Global and Knowledgebased Economy. part II: Assessment at the EU Country Level. Report for the European Commission], by estimating the values of the relevant parameters for men and women and introducing several variables specifically related to maternity leaves and benefits. As a preliminary step, we evaluate the effect of education on the wage profile. We estimate the Mincerian coefficients for 12 West European countries using the EU-SILC data for 2007 and use them as input in the optimisation problem of the individual to calibrate the model. Finally, we analyse the impact and relevance of several public policy variables. In particular, we evaluate the elasticities of the returns on education with respect to unemployment benefits, marginal and average tax rates, maternity leaves and childcare benefits." (Author's abstract, IAB-Doku) ((en))Bildungsertrag - internationaler Vergleich, Humankapital, geschlechtsspezifische Faktoren, Westeuropa, Österreich, Belgien, Dänemark, Frankreich, Bundesrepublik Deutschland, Irland, Italien, Luxemburg, Niederlande, Portugal, Spanien, Schweden

On the efficiency properties of the Roy’s model under uncertainty and market incompleteness

We consider Roy’s economies with perfectly competitive labor markets and uncertainty. Firms choose their investments in physical capital before observing the characteristics of the workers that they will hire. We provide conditions under which equilibrium allocations are constrained Pareto efficient, i.e., such that it is impossible to improve upon the equilibrium allocation by changing agents’ investments in human and physical capital and letting the other endogenous variables adjust to restore market clearing. We also provide a robust example of a class of economies where equilibria are constrained Pareto inefficient due to overinvestments in high skills

Gender and private returns to education : a cross-European analysis

The paper compares private returns to education of men and women for fourteen E.U. countries. Building on de la Fuente (2003), I define the rate of return as the discount rate equalizing marginal costs and benefits of education. I extend his model by estimating separately the values of the relevant parmeters for men and women and introducing variables specifically related to maternity leaves and benefits. The main result is that, given the profiles of earning of a man and a woman studying the average numbers of years in each country and working full-time up the end of their active lifes, women’s rates of return are higher for most countries

Income taxes, subsidies to education, and investments in human capital

"We study a two-sector economy with investments in human and physical capital and imperfect labor markets. Human and physical capital are heterogeneous. Workers and firms endogenously select the sector they are active in and choose the amount of their sector-specific investments. To enter the high-skill sector, workers must pay a fixed cost that we interpret as a direct cost of education. Given the distribution of the agents across sectors, at equilibrium, in each sector there is underinvestment in both human and physical capital, due to non-contractibility of investments. A second source of inefficiency is related to the self-selection of the agents into the two sectors: typically too many workers invest in education. Under suitable restrictions on the parameters, the joint effect of the two distortions is that equilibria are characterized by too many people investing too little effort in the high skill sector. We also analyze the welfare properties of equilibria and study the effects of several tax policies on the total expected surplus. In particular, consider the equilibrium associated with a flat labor income tax. Under suitable restrictions on the parameters, a revenue neutral progressive change in the marginal tax rates is welfare improving." (Author's abstract, IAB-Doku) ((en))Humankapital, Einkommensteuer, Lohnsteuer, Bildungsinvestitionen, Arbeitsmarktmodell, Marktunvollkommenheit, matching, Arbeitsmarktgleichgewicht, gesellschaftliche Wohlfahrt, Unterqualifikation, Steuerpolitik, Verteilungseffekte, Bildungsertrag, Einkommenseffekte

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

"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." (Author's abstract, IAB-Doku) ((en))Humankapital, Bildungsinvestitionen, matching, Arbeitskräfteangebot, Arbeitsmarktmodell, Arbeitsmarktgleichgewicht, Überqualifikation, Unterqualifikation

Income tax, subsidies to education, and investments in human capital in a two-sector economy

The paper studies a two-sector economy with investments in human and physical capital and imperfect labor markets. Workers and firms endogenously select the sector they are active in, and choose the amount of their investments. To enter the high-skill sector, workers must pay a fixed cost that we interpret as direct cost of education. The economy is characterized by two different pecuniary externalities. Given the distribution of the agents across sectors, at equilibrium, in each sector there is underinvestment in both human and physical capital, due to non-contractibility of investments. A second pecuniary externality is induced by the self-selection of the agents in the two sectors. When total factor productivities are sufficiently diverse, subsidies to labor income in the low skill sector and fixed taxes on the direct costs of education increase total surplus, while subsidies to labor income in the high skill sector can actually reduce it.Human capital; Efficiency; Labour income tax

A re-examination of constrained Pareto inefficiency in economies with incomplete markets

We establish that, when the number of agents is sufficiently large, but finite, there are open sets of economies with constrained Pareto inefficient equilibria, and provide a simple sufficient condition for CP inefficiency. We also show that there are open sets of economies with CPO equilibria.Wir zeigen, dass, wenn die Zahl der Agenten ausreichend groß, aber endlich ist, offene Sets an Ökonomien mit eingeschränkter Paret-Effizienz (CP) existieren und bieten eine einfache hinreichende Bedingung für CP-Ineffizienz. Wir zeigen auch, dass offene Sets an Ökonomien mit CPO-Gleichgewichten existieren

On the efficiency properties of the Roy's model under asymmetric information

We consider Roy's economies with perfectly competitive labor markets and asymmetric information. Firms choose their investments in physical capital before observing the characteristics of the labor markets they will face. We provide conditions under which equilibrium allocations are constrained Pareto efficient, i.e., such that it is impossible to improve upon the equilibrium allocation by changing agents' investments and letting the other endogenous variables adjust to restore market clearing. We also provide a robust example of a class of economies where these conditions fail and where equilibria are characterized by overinvestments in high skills. Finally, we discuss some implications of our main results for the optimal taxation literature.Wir untersuchen Roy'sche Modellökonomien mit perfekt kompetitiven Arbeitsmärkten und asymetrischen Informationen. Firmen entscheiden über ihre Investitionen in Sachkapital bevor ihnen die Charakteristiken des Arbeitsmarktes bekannt sind. Wir bestimmen Bedingungen unter denen die Gleichgewichtsaufteilung beschränkt Pareto effizient ist, d.h. es ist unmöglich die Gleichgewichtsaufteilung durch Änderungen im Investitionsverhalten zu verbessern und die anderen endogenen Variablen sich so anpassen zu lassen, dass die Markträumung wieder hergestellt wird. Wir zeigen anhand eines robusten Beispiels mit einer Klasse an Modellökonomien bei denen diese Bedingungen verletzt sind und bei denen die Gleichgewichte durch Überinvestitionen in hohe Qualifikationen gekennzeichnet sind. Schließlich diskutieren wir einige Implikationen unserer Hauptresultate für die Forschung zur optimalen Besteuerung

The gender gap of returns on education across West European countries

"We study the returns on education in Europe in a comparative perspective. We extend the model of de la Fuente ((2003). Human Capital in a Global and Knowledgebased Economy. part II: Assessment at the EU Country Level. Report for the European Commission), by estimating the values of the relevant parameters for men and women and introducing several variables specifically related to maternity leaves and benefits. As a preliminary step, we evaluate the effect of education on the wage profile. We estimate the Mincerian coefficients for 12 West European countries using the EU-SILC data for 2007 and use them as input in the optimisation problem of the individual to calibrate the model. Finally, we analyse the impact and relevance of several public policy variables. In particular, we evaluate the elasticities of the returns to education with respect to unemployment benefits, marginal and average tax rates, maternity leave and childcare benefits." (author's abstract)"Wir untersuchen die Bildungserträge in Europa in vergleichender Perspektive. Wir erweitern dazu das Modell von de la Fuente ((2003). Human Capital in a Global and Knowledge-based Economy. part II: Assessment at the EU Country Level. Report for the European Commission), indem wir die relevanten Parameter für Männer und Frauen schätzen und einige Variablen für staatliche Leistungen bei Eltern- oder Erziehungsurlaub und für Kinderbetreuung einführen. Daneben untersuchen wir den Einfluss der Bildung auf das Lohnprofil. Wir schätzen die Mincer-Koeffizienten für 12 westeuropäische Länder mit den EU-SILC-Daten für 2007 und nutzen sie als Input zur Kalibrierung eines Modells des Optimierungsproblem eines Individuums. Schließlich analysieren wir die Auswirkung und Relevanz verschiedener Politikbereiche. Insbesondere schätzen wir die Elastizitäten der Bildungserträge im Hinblick auf Änderungen der Arbeitslosenunterstützung, der marginalen und durchschnittlichen Steuersätze und Leistungen bei Mutterschaft und für Kinderbetreuung." (Autorenreferat

Income taxes, subsidies to education, and investments in human capital

We study a two-sector economy with investments in human and physical capital and imperfect labor markets. Human and physical capital are heterogeneous. Workers and firms endogenously select the sector they are active in, and choose the amount of their sector-specific investments in human and physical capital. To enter the high-skill sector, workers must pay a fixed cost that we interpret as direct cost of education. Given the distribution of the agents across sectors, at equilibrium, in each sector there is underinvestment in both human and physical capital, due to non-contractibility of investments. A second source of inefficiency is related to the self-selection of the agents into the two sectors. It typically induces too many workers to invest in education. Under suitable restrictions on the parameters, the joint effect of the two distortions is that equilibria are characterized by too many people investing too little effort in the high skill sector. We also analyze the welfare properties of equilibria and study the effects of several tax-subsidy policies on the total expected surplus