Jobs,education and the underdevelopment trap

The purpose of this paper is to examine the complementarity between job opportunities and the level of worker education as a cause of the underdevelopment trap. I show that if firms or workers in the labour market have to spend money or time searching for a partner, then an underdevelopment trap may occur. This underdevelopment trap occurs due to thc complementarity between the firms' decision about their entry into the market and the workers' choice of the length of her education. This paper stresses the importance of a decrease in private costs of receiving higher education and recruiting new workers.