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Education and the Allocation of Talent

Hans K. Hvide

Norwegian School of Economics

I study how education affects the allocation of talent into different sectors of the economy. I focus on two forces. First, education adds to a worker’s information capital and, thus, may change her self‐confidence. Second, performance contracts give a worker incentives to choose a sector according to her abilities. The baseline model predicts that workers with intermediate ability educate, while the most able skip education. In an extension, I compare the U.K. and the U.S. bachelor’s degrees and, moreover, discuss hybrid educational systems, common in Europe, that offer both U.K. and U.S. types of bachelor’s degrees.

DOI

10.1086/377028

Volume

21 (4)

Pages

945-976

Language

en

Export

BibTeX

Sources

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