Education and the Allocation of Talent

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Abstract

I study how education affects the allocation of talent into different sectors of the economy. I focus on two forces. First, education adds to a worker's information capital and, thus, may change her self-confidence. Second, performance contracts give a worker incentives to choose a sector according to her abilities. The baseline model predicts that workers with intermediate ability educate, while the most able skip education. In an extension, I compare the U. K. and the U. S. bachelor's degrees and, moreover, discuss hybrid educational systems, common in Europe, that offer both U. K. and U. S. types of bachelor's degrees.

Original languageEnglish
Pages (from-to)945-976
Number of pages31
JournalJournal Of Labor Economics
Volume21
Issue number4
DOIs
Publication statusPublished - 2003

Keywords

  • MARKET
  • OVERCONFIDENCE
  • GROWTH
  • CAREER

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