Endogenous fluctuations in the demand for education |
| |
Authors: | Michael Neugart Jan Tuinstra |
| |
Institution: | (1) Center for European Studies, Harvard University, 27 Kirkland Street, Cambridge, MA 02138, USA (e-mail: neugart@fas.harvard.edu) , US;(2) Department of Quantitative Economics and CeNDEF, University of Amsterdam, Roetersstraat 11, 1018 WB Amsterdam, The Netherlands (e-mail: j.tuinstra@uva.nl) , NL |
| |
Abstract: | Abstract. Enrollment rates to higher education reveal a quite large variation over time which cannot be explained by productivity shocks
alone. We develop a human capital investment model in an overlapping generations framework that features endogenous fluctuations
in the demand for education. Agents are heterogeneous in their beliefs about future wage differentials. An evolutionary competition
between the heterogeneous beliefs determines the fraction of the newborn generation having a certain belief. Costly access
to information on the returns to education induces agents to use potentially destabilizing backward looking prediction rules.
Only if previous generations experience regret about their human capital investment decisions, will agents choose a more sophisticated
prediction rule that dampens the cycle. Access to information becomes key for stable flows to higher education.
RID="*"
ID="*"We would like to thank Cars Hommes, Florian Wagener, seminar participants at the University of Amsterdam, participants
of the workshop on ‘Skill Needs and Labor Market Dynamics’ at the Wissenschaftszentrum Berlin für Sozialforschung (WZB) for
helpful discussions, and an editor of this Journal and three anonymous referees for their comments. Tuinstra's research is
supported by the Netherlands Organisation for Scientific Research (NWO) under a MaG-Pionier grant. Neugart acknowledges financial
support from the German Ministry of Education. Parts of the research were done while Tuinstra was visiting the WZB and when
Neugart was visiting CeNDEF.
Correspondence to: The research for this paper was done while the first author was affiliated with the Wissenschaftszentrum Berlin für Sozialforschung. |
| |
Keywords: | : Expectations – Human capital investment – Endogenous fluctuations – Inter-generational spill-overs – Evolutionary dynamics – Bifurcation analysis |
本文献已被 SpringerLink 等数据库收录! |
|