Education and work
Trostel, Philip A. and Walker, Ian, 1954- (2000) Education and work. Working Paper. Coventry: University of Warwick, Department of Economics. (Warwick economic research papers).
WRAP_Trostel_twerp554.pdf - Requires a PDF viewer such as GSview, Xpdf or Adobe Acrobat Reader
Official URL: http://www2.warwick.ac.uk/fac/soc/economics/resear...
This paper examines the linkage between the incentives to work and to invest in human capital through education. These incentives are shown to be mutally reinforcing in a simple stylized model. This theoretical predicton is investigated empirically using three large micro datasets covering a broad set of countries. As one might expect, education and work are strongly (positively) correlated. This correlation has important implications for models of fiscal policy and economic growth. It also has important implications for the estimation of labor supply and the rate of return to education.
|Item Type:||Working or Discussion Paper (Working Paper)|
|Subjects:||H Social Sciences > HD Industries. Land use. Labor|
|Divisions:||Faculty of Social Sciences > Economics|
|Library of Congress Subject Headings (LCSH):||Education -- Economic aspects, Wages -- Effect of education on, Labor supply -- Effect of education on, Economic development|
|Series Name:||Warwick economic research papers|
|Publisher:||University of Warwick, Department of Economics|
|Place of Publication:||Coventry|
|Number of Pages:||38|
|Status:||Not Peer Reviewed|
|Access rights to Published version:||Open Access|
|Funder:||European Commission (EC)|
|Grant number:||982044 (EC)|
|References:||Agell, Jonas and Kjell Erik Lommerud, "Minimum Wages and the Incentives for Skill Formation" Journal of Public Economics, April 1997, 64(1), 25-40. Ashenfelter, Orley and John Ham, "Education, Unemployment, and Earnings" Journal of Political Economy, October 1979, 87(5), S99-116. , Colm Harmon, and Hessel Oosterbeek, "A Review of the Schooling/Earnings Relationship with Tests for Publication Bias" NBER Working Paper 7457, 2000. Altonji, Joseph G, "Intertemporal Substitution in Labor Supply: Evidence from Micro Data" Journal of Political Economy, June 1986, 94(3), S176-215. Barro, Robert J and Xavier Sala-i-Martin, Economic Growth, New York: McGraw-Hill, 1995. Becker, Gary S, "A Theory of the Allocation of Time" Economic Journal, September 1965, 75(2), 493-517. , Human Capital, 3rd ed, Chicago: University of Chicago Press, 1993. , Kevin M Murphy, and Robert Tamura, "Human Capital, Fertility, and Economic Growth" Journal of Political Economy, October 1990, 98(5), S12-37. Blau, Francine D, "Trends in the Well-Being of American Women, 1970-1995" Journal of Economic Literature, 36(1), March 1998, 112-65. Blinder, Alan S and Yoram Weiss, "Human Capital and Labor Supply: A Synthesis" Journal of Political Economy, June 1976, 84(3), 449-72. Blundell, Richard, Alan Duncan, and Costas Meghir, "Estimating Labor Supply Responses Using Tax Reforms" Econometrica, July 1998, 66(4), 827-61. and Thomas MaCurdy, "Labour Supply: A Review of Alternative Approaches" in Orley Ashenfelter and David Card (eds), Handbook of Labor Economics, Vol 3A, Amsterdam: North-Holland, forthcoming. Caballé, Jordi and Manuel S Santos, "On Endogenous Growth with Physical and Human Capital" Journal of Political Economy, December 1993, 101(6), 1042-67. Card, David, "Intertemporal Labour Supply: An Assessment" in Christopher A Sims (ed), Advances in Econometrics, Cambridge: Cambridge University Press, 1994. , "Earnings, Schooling, and Ability Revisited" Research in Labor Economics, 1995, 14(1), 23-48. Davies, James and John Whalley, "Taxes and Capital Formation: How Important is Human Capital?" in B Douglas Bernheim and John B Shoven (eds), National Saving and Economic Performance, Chicago: University of Chicago Press, 1991. Dearden, Lorraine, "Qualifications and Earnings in Britain: How Reliable are Conventional OLS Estimates of the Returns to Education?" IFS Working Paper W99/7, 1999. De Gregorio, José, "Borrowing Constraints, Human Capital Accumulation, and Growth" Journal of Monetary Economics, February 1996, 37(1), 49-71. Department of Social Security, Income-Related Benefits: Estimates of Take-Up in 1995-96, London: HMSO, 1997. Dupor, Bill, Lance Lochner, Christopher Taber, and Mary Beth Wittekind, "Some Effects of Taxes on Schooling and Training" American Economic Review, May 1996, 86(2), 340-46. Eckstein, Zvi and Kenneth I Wolpin, "Dynamic Labour Force Participation of Married Women and Endogenous Work Experience" Review of Economic Studies, July 1989, 56(3), 375-90. Ehrlich, Isaac and Francis T Lui, "Intergenerational Trade, Longevity, and Economic Growth" Journal of Political Economy, October 1991, 99(5), 1029-59. Ghez, Gilbert R and Gary S Becker, The Allocation of Time and Goods Over the Life Cycle, New York: Columbia University Press, 1975. Glomm, Gerhard and B Ravikumar, "Public versus Private Investment in Human Capital: Endogenous Growth and Income Inequality" Journal of Political Economy, August 1992, 100(4), 813-34. and , "Productive Government Expenditures and Long-Run Growth" Journal of Economic Dynamics and Control, January 1997, 21(1), 183-204. Gustman, Alan L and Thomas L Steinmeier, "Retirement Outcomes in the Health and Retirement Study" NBER Working Paper 7588, 2000. Ham, John C, "Testing whether Unemployment Represents Intertemporal Labour Supply Behaviour" Review of Economic Studies, 1986, 53(4), 559-78. Heckman, James J, "A Life-Cycle Model of Earnings, Learning, and Consumption" Journal of Political Economy, August 1976, 84(4), S11-44. , "What Has Been Learned About Labor Supply in the Past Twenty Years?" American Economic Review, May 1993, 83(2), 116-21. Jones, Larry E and Rodolfo E Manuelli, "Finite Lifetimes and Growth" Journal of Economic Theory, December 1992, 58(2), 171-97. , , and Peter E. Rossi, "Optimal Taxation in Models of Endogenous Growth," Journal of Political Economy, June 1993, 101(3), 486-517. Kaplow, Louis, "On the Divergence Between 'Ideal' and Conventional Income-Tax Treatment of Human Capital" American Economic Review, May 1996, 86(2), 347-52. Killingsworth, Mark R, Labor Supply, Cambridge: Cambridge University Press, 1993. and James J Heckman, "Female Labor Supply: A Survey," in Orley Ashenfelter and Richard Layard (eds), Handbook of Labor Economics, Vol 1, Amsterdam: North-Holland, 1986. Kim, Se-Jik, "Growth Effect of Taxes in an Endogenous Growth Model: To What Extent Do Taxes Affect Economic Growth?" Journal of Economic Dynamics & Control, October 1998, 23(1), 125-58. King, Robert G and Sergio Rebelo, "Public Policy and Economic Growth: Developing Neoclassical Implications" Journal of Political Economy, October 1990, 98(5), S126-50. Lin, Shuanglin, "Labor Income Taxation and Human Capital Accumulation" Journal of Public Economics, May 1998, 68(2), 291-302. Lord, William, "The Transition from Payroll to Consumption Receipts with Endogenous Human Capital" Journal of Public Economics, February 1989, 38(1), 53-73. and Peter Rangazas, "Capital Accumulation in a General Equilibrium Model with Risky Human Capital" Journal of Macroeconomics, Summer 1998, 20(3), 509-31. Lucas, Robert E, Jr, "On the Mechanics of Economic Development" Journal of Monetary Economics, July 1988, 22(1), 3-42. , "Making a Miracle" Econometrica, March 1993, 61(2), 251- 72. Michael, Robert T, The Effect of Education on Efficiency in Consumption, New York: Columbia University Press, 1972. Mendoza, Enrique G, Gian Maria Milesi-Ferretti, and Patrick Asea, "On the Ineffectiveness of Tax Policy in Altering Long-Run Growth: Harberger's Superneutrality Conjecture" Journal of Public Economics, October 1997, 66(1), 99-126. Milesi-Ferretti, Gian Maria and Nouriel Roubini, "On the Taxation of Human and Physical Capital in Models of Endogenous Growth" Journal of Public Economics, November 1998, 70(2), 237-54. Mincer, Jacob, Schooling, Experience, and Earnings, New York: Columbia University Press, 1974. Mino, Kazuo, "Analysis of a Two-Sector Model of Endogenous Growth with Capital Income Taxation" International Economic Review, February 1996, 37(1), 227-51. Mroz, Thomas A, "The Sensitivity of an Empirical Model of Married Women's Hours of Work to Economic and Statistical Assumptions" Econometrica, July 1987, 55(4), 765-800. Mulligan, Casey B and Xavier Sala-i-Martin, "Transitional Dynamics in Two-Sector Models of Endogenous Growth" Quarterly Journal of Economics, August 1993, 108(3), 739-73. Nerlove, Marc, Assaf Razin, Efraim Sadka, and Robert K von Weizsacker, "Comprehensive Income Taxation, Investments in Human and Physical Capital, and Productivity" Journal of Public Economics, March 1993, 50(3), 397-406. Nickell, Stephen, "Education and Lifetime Patterns of Unemployment" Journal of Political Economy, October 1979, 87(5), S117-31. and Brian Bell, "Changes in the Distribution of Wages and Unemployment in OECD Countries" American Economic Review, May 1996, 82(2), 302-08. Ortigueira, Salvador and Manuel S Santos, "On the Speed of Convergence in Endogenous Growth Models" American Economic Review, June 1997, 87(3), 383-99. Pencavel, John, "Labor Supply of Men: A Survey," in Orley Ashenfelter and Richard Layard (eds), Handbook of Labor Economics, Vol 1, Amsterdam: North-Holland, 1986. Perroni, Carlo, "Joint Production of Goods and Knowledge: Implications for Tax Reform" International Tax and Public Finance, May 1997, 4(2), 149-65. Phelps, Edmund S and Gylfi Zoega, "The Rise and Downward Trend of the Natural Rate" American Economic Review, May 1997, 87(2), 283-89. Psacharopoulos, George, "Returns to Investment in Education: A Global Update" World Development, September 1994, 22(9), 1325-43. Rebelo, Sergio, "Long-Run Policy Analysis and Long-Run Growth" Journal of Political Economy, June 1991, 99(3), 500-21. Ríos-Rull, José-Víctor, "Working in the Market, Working at Home, and the Acquisition of Skills: A General Equilibrium Approach" American Economic Review, September 1993, 83(4), 893-907. Ryder, Harl E, Frank P Stafford, and Paula E Stephan, "Labor, Leisure and Training over the Life Cycle" International Economic Review, October 1976, 17(3), 651-74. Shaw, Kathryn L, "An Empirical Analysis of Risk Aversion and Income Growth" Journal of Labor Economics, October 1996, 14(4), 626-53. Stokey, Nancy L and Sergio Rebelo, "Growth Effects of Flat-Rate Taxes" Journal of Political Economy, June 1995, 103(3), 519-50. Stuerle, C. Eugene, "How Should Government Allocate Subsidies for Human Capital?" American Economic Review, May 1996, 86(2), 353-57. Tamura, Robert, "Income Convergence in an Endogenous Growth Model" Journal of Political Economy, June 1991, 99(3), 522-40. Trostel, Philip A, "The Effect of Taxation on Human Capital" Journal of Political Economy, April 1993, 101(2), 327-50. , Carlo Perroni, and Ian Walker, "Are Investments in Human Capital Risky?" grant proposal, 1998. Weiss, Yoram and Reuben Gronau, "Expected Interruptions in Labour Force Participation and Sex-Related Differences in Earnings Growth" Review of Economic Studies, October 1981, 48(4), 607-19.|
Actions (login required)