Optimal Higher Education Enrollment and Productivity Externalities in a Two-Sector Model

17 Pages Posted: 22 Aug 2012

See all articles by Volker Meier

Volker Meier

CESifo (Center for Economic Studies and Ifo Institute for Economic Research); Ifo Institute for Economic Research at the University of Munich

Ioana C. Schiopu

ESADE Ramon Llull University - Department of Economics

Date Written: July 31, 2012

Abstract

We investigate externalities in higher education enrollment over the course of development in a two-sector model. Each sector works with only one type of labor, skilled or unskilled, and individuals are differentiated according to their cost of acquiring human capital. Both sectors exhibit productivity externalities in the size of the skill-specific labor and in the average human capital of workers. When skill-biased technological change prevails, it may well be the case that intermediate stages of development witness under enrollment in higher education, while highly developed economies experience over enrollment.

Keywords: higher education, enrollment, externalities, two-sector model

JEL Classification: D620, H230, I210, J240, O100

Suggested Citation

Meier, Volker and Schiopu, Ioana C., Optimal Higher Education Enrollment and Productivity Externalities in a Two-Sector Model (July 31, 2012). CESifo Working Paper Series No. 3889. Available at SSRN: https://ssrn.com/abstract=2133155

Volker Meier (Contact Author)

CESifo (Center for Economic Studies and Ifo Institute for Economic Research) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

Ifo Institute for Economic Research at the University of Munich ( email )

Poschingerstr. 5
Munich
Germany

Ioana C. Schiopu

ESADE Ramon Llull University - Department of Economics ( email )

Av. de Pedralbes, 60-62
Barcelona, 08034
Spain

HOME PAGE: http://profesores.esade.edu/ioanaschiopu

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