Can education save Europe from high unemployment?

Arbeitspapier

Empirical observations show that education helps to protect against labor market risks. This is twofold: The higher educated face a higher expected wage income and a lower probability of being unemployed. Although this relationship has been analyzed in the literature broadly, several questions remain to be tackled. This paper contributes to the existing literature by looking at the above mentioned phenomena from a purely theoretic perspective and in a European context. We set up a model with search-and-matching frictions, collective bargaining and monopolistic competition in the product market. Workers are heterogeneous in their human capital level. It is shown that higher human capital increases the wage rate and reduces unemployment risks, which is consistent with empirical observations for European countries.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: SFB 649 Discussion Paper ; No. 2008,039

Classification and Topics

• Classification: Wirtschaft ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity ; Human Capital; Skills; Occupational Choice; Labor Productivity ; Dispute Resolution: Strikes, Arbitration, and Mediation; Collective Bargaining
• Subject: Human capital ; search frictions ; collective bargaining ; monopolistic competition ; Humankapital ; Bildungsniveau ; Arbeitsmarkttheorie ; Arbeitsuche ; Matching ; Lohnverhandlungstheorie ; Monopolistischer Wettbewerb ; Lohnniveau ; Arbeitsplatzsicherung ; Theorie ; Europa

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Walter, Nicole ; Xie, Runli
• Event: Veröffentlichung
• (who): Humboldt University of Berlin, Collaborative Research Center 649 - Economic Risk
• (where): Berlin
• (when): 2008

Further information

• Handle: http://hdl.handle.net/10419/25281
• Last update: 10.03.2025, 11:46 AM CET