Job Market Paper

The Impact of Wage Premiums on Educational Attainment and Social Mobility

This paper investigates the role that wage premiums play for educational attainment and intergenerational social mobility. An important difference between countries with low and high levels of social mobility is the extent of upward mobility of children from low income families. This is mainly explained by the probability of high school dropout. I develop a model with three levels of education in which children facing a credit constraint choose which level of education to attain based on a transfer that they receive from their parents. I find in an empirical exercise that in the U. S. the opportunity cost of education is more important in explaining the high school dropout rate of men than the return on education. The model and the empirical results imply that a policy that reduces the opportunity cost of education and is paid by higher taxation on graduates, reducing the return on education, could decrease dropout rates, and also increase the number of graduates not facing a binding credit constraint. Such a policy could also be effective in increasing the college graduation rate of poor students and in decreasing levels of student debt.

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Explaining Trends in Fertility and Childlessness in Germany

With Concepció Patxot and Gemma Abío

In this paper, we analyse the decline in fertility in Germany. Decomposing the decline in completed fertility in Germany after the Second World War, we observe two distinct stages: In the first stage the decline in fertility is due to a decrease in intensive fertility (number of children per women with at least one child), whereas in the second stage the decline is due to a decrease in extensive fertility (increase in childlessness). Based on an event study approach, we argue that there are substantial fix costs of having children for women independent of their education level. We are working on an overlapping generations model with childlessness and quantity quality trade-off. The idea is to explain the decline in intensive fertility with a quantity quality trade-off and the increase in childlessness with an increase in the importance of the fix costs of having children due to the increase in the labour force participation of women.

Working Paper following soon.

 

Determining Education Quality in a Greying Society

With Gianko Michailidis

The increase in income inequality and the population aging are two of the major trends in developed countries. In this paper, we analyze the effect of these on education quality and pensions. For this, we developed an overlapping generations model with public and private education, a pay-as-you-go pension system, endogenous fertility, and probabilistic voting on pensions and education spending. In this model, an increase in income inequality increases the quality of both public pensions and public education, and decreases the participation in public education and fertility. An increase in the share of retirees in the economy decreases the quality of public education and public education, while decreasing the participation in public education and the fertility rate. The empirical confirmation of the above results with data on OECD countries is work in progress.

Working Paper following soon.