[go: up one dir, main page]

IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/22010.html
   My bibliography  Save this paper

MisMatch in Human Capital Accumulation

Author

Listed:
  • Russell Cooper
  • Huacong Liu
Abstract
This paper studies the allocation of heterogeneous agents to levels of educational attainment. The goal is to understand the magnitudes and sources of mismatch in this assignment, both in theory and in the data. The paper presents evidence of substantial mismatch between ability and educational attainment across 21 OECD countries, with a focus on Germany, Italy, Japan and the US. In the model, mismatch originates from: (i) taste shocks, (ii) binding borrowing constraints and (iii) noisy measures of ability in test scores. The model is estimated using a simulated method of moments approach. The main finding is that measured mismatch arises largely from noise in test scores and does not reflect borrowing constraints. Differences in tastes for education across households play a minor role in explaining mismatch. Further, the estimation allows us to decompose the college wage premium, isolating cross-country differences in selection effects from the return to education.

Suggested Citation

  • Russell Cooper & Huacong Liu, 2016. "MisMatch in Human Capital Accumulation," NBER Working Papers 22010, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:22010
    Note: ED EFG
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w22010.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Hanushek, Eric A. & Schwerdt, Guido & Wiederhold, Simon & Woessmann, Ludger, 2015. "Returns to skills around the world: Evidence from PIAAC," European Economic Review, Elsevier, vol. 73(C), pages 103-130.
    2. Jerome Adda & Russell W. Cooper, 2003. "Dynamic Economics: Quantitative Methods and Applications," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262012014, April.
    3. Ariga, Kenn & Brunello, Giorgio, 2007. "Does Secondary School Tracking Affect Performance? Evidence from IALS," IZA Discussion Papers 2643, Institute of Labor Economics (IZA).
    4. Charles I. Jones, 2015. "Pareto and Piketty: The Macroeconomics of Top Income and Wealth Inequality," Journal of Economic Perspectives, American Economic Association, vol. 29(1), pages 29-46, Winter.
    5. Smith, Jonathan & Pender, Matea & Howell, Jessica, 2013. "The full extent of student-college academic undermatch," Economics of Education Review, Elsevier, vol. 32(C), pages 247-261.
    6. Müge Adalet McGowan & Dan Andrews, 2015. "Skill Mismatch and Public Policy in OECD Countries," OECD Economics Department Working Papers 1210, OECD Publishing.
    7. Giorgio Brunello & Daniele Checchi, 2007. "Does school tracking affect equality of opportunity? New international evidence [‘Educational opportunities and the role of institutions’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 22(52), pages 782-861.
    8. KAWAGUCHI Daiji & MORI Yuko, 2014. "Winning the Race against Technology," Discussion papers 14017, Research Institute of Economy, Trade and Industry (RIETI).
    9. Christian Dustmann, 2004. "Parental background, secondary school track choice, and wages," Oxford Economic Papers, Oxford University Press, vol. 56(2), pages 209-230, April.
    10. Weiss, Andrew, 1983. "A Sorting-cum-Learning Model of Education," Journal of Political Economy, University of Chicago Press, vol. 91(3), pages 420-442, June.
    11. Eleanor Wiske Dillon & Jeffrey Andrew Smith, 2013. "The Determinants of Mismatch Between Students and Colleges," NBER Working Papers 19286, National Bureau of Economic Research, Inc.
    12. Keane, Michael P & Wolpin, Kenneth I, 2001. "The Effect of Parental Transfers and Borrowing Constraints on Educational Attainment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(4), pages 1051-1103, November.
    13. Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 87(3), pages 355-374.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Li, Xing & Guo, Yue & Hou, Jiani & Liu, Jun, 2021. "Human Capital Allocation and Enterprise Innovation Performance: An Example of China's Knowledge-Intensive Service Industry," Research in International Business and Finance, Elsevier, vol. 58(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cervantes, Carla Varona & Cooper, Russell, 2022. "Labor market implications of education mismatch," European Economic Review, Elsevier, vol. 148(C).
    2. Daniele Checchi & Luca Flabbi, 2013. "Intergenerational Mobility and Schooling Decisions in Germany and Italy: The Impact of Secondary School Tracks," Rivista di Politica Economica, SIPI Spa, issue 3, pages 7-57, July-Sept.
    3. Lisa Grazzini, 2016. "The Importance of the Quality of Education: Some Determinants and its Effects on Earning Returns and Economic Growth," ECONOMIA PUBBLICA, FrancoAngeli Editore, vol. 2016(2), pages 43-82.
    4. Annabelle Krause & Simone Schüller, 2014. "Evidence and Persistence of Education Inequality in an Early-Tracking System - The German Case," FBK-IRVAPP Working Papers 2014-07, Research Institute for the Evaluation of Public Policies (IRVAPP), Bruno Kessler Foundation.
    5. Michela Carlana & Eliana La Ferrara & Paolo Pinotti, 2022. "Goals and Gaps: Educational Careers of Immigrant Children," Econometrica, Econometric Society, vol. 90(1), pages 1-29, January.
    6. La Ferrara, Eliana & Carlana, Michela & Pinotti, Paolo, 2017. "Goals and Gaps: Educational Careers of Immigrant Children," CEPR Discussion Papers 12538, C.E.P.R. Discussion Papers.
    7. Barbara Ermini & Luca Papi & Francesca Scaturro, 2016. "Over-education among italian Ph.D. graduates. Does the crisis make a difference?," Mo.Fi.R. Working Papers 126, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
    8. Armin Falk & Fabian Kosse & Pia Pinger, 2020. "Mentoring and Schooling Decisions: Causal Evidence," CESifo Working Paper Series 8382, CESifo.
    9. Ludger Woessmann, 2016. "The Importance of School Systems: Evidence from International Differences in Student Achievement," Journal of Economic Perspectives, American Economic Association, vol. 30(3), pages 3-32, Summer.
    10. Bönke Timm & Neidhöfer Guido, 2018. "Parental Background Matters: Intergenerational Mobility and Assimilation of Italian Immigrants in Germany," German Economic Review, De Gruyter, vol. 19(1), pages 1-31, February.
    11. Jens Ruhose, 2015. "Microeconometric Analyses on Economic Consequences of Selective Migration," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 61.
    12. Biewen, Martin & (neé Tapalaga), Madalina Thiele, 2020. "Early tracking, academic vs. vocational training, and the value of ‘second-chance’ options," Labour Economics, Elsevier, vol. 66(C).
    13. Luigi Benfratello & Giuseppe Sorrenti & Gilberto Turati, 2015. "Tracking in the Tracks in the Italian Schooling: Inequality Patterns in an Urban Context," Working papers 030, Department of Economics, Social Studies, Applied Mathematics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino.
    14. Debora Di Gioacchino & Laura Sabani & Simone Tedeschi, 2016. "Differences in education systems across OECD countries: the role ofeducation policy preferences in a hierarchical system," Working Papers in Public Economics 177, Department of Economics and Law, Sapienza University of Roma.
    15. Patrizio Frederic & Michele Lalla, 2024. "Lower-to-upper secondary school transition: a Bayesian Lasso approach in data modelling," Quality & Quantity: International Journal of Methodology, Springer, vol. 58(4), pages 3133-3154, August.
    16. Matthewes, Sonke, 2020. "Better together? Heterogeneous effects of tracking on student achievement," LSE Research Online Documents on Economics 108478, London School of Economics and Political Science, LSE Library.
    17. Ludger Wößmann & Florian Schoner & Vera Freundl & Franziska Pfaehler, 2023. "Der ifo-„Ein Herz für Kinder“- Chancenmonitor: Wie (un-)gerecht sind die Bildungschancen von Kindern aus verschiedenen Familien in Deutschland verteilt?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 76(04), pages 29-47, April.
    18. Carmen Aina & Chiara Mussida & Gabriele Lombardi, 2023. "Are Business and Economics Alike?," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 9(2), pages 557-585, July.
    19. Sönke Hendrik Matthewes, 2020. "Better together? Heterogeneous effects of tracking on student achievement," CEP Discussion Papers dp1706.pdf, Centre for Economic Performance, LSE.
    20. Ludger Woessmann, 2009. "International Evidence on School Tracking: A Review," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 7(01), pages 26-34, April.

    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:22010. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.