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Skill Formation, Temporary Disadvantage and Elite Education

Author

Listed:
  • Per Hjertstrand
  • Pehr-Johan Norbäck
  • Lars Persson

Abstract

Elite skills have become crucial in today’s superstar economy. We develop a multi-period skill-formation model where we show that individuals with temporary disadvantages must exert greater effort to gain access to elite education. This “underdog-incentive effect” implies that “educated underdogs” obtain superior adult skills. We find support for this mechanism in soccer data: players born early in the year dominate youth soccer, but players born late (but not too late) in the year become the superstars. We also show that if young students discount the future “too much”, high requirements to elite education can increase expected life-time welfare for disadvantaged students.

Suggested Citation

  • Per Hjertstrand & Pehr-Johan Norbäck & Lars Persson, 2020. "Skill Formation, Temporary Disadvantage and Elite Education," CESifo Working Paper Series 8612, CESifo.
    • Handle: RePEc:ces:ceswps:_8612
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    File URL: https://www.cesifo.org/DocDL/cesifo1_wp8612.pdf
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    References listed on IDEAS

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    1. Kim, Tae-Hwan & White, Halbert, 2004. "On more robust estimation of skewness and kurtosis," Finance Research Letters, Elsevier, vol. 1(1), pages 56-73, March.
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    More about this item

    Keywords

    skill formation; temporary disadvantage; elite education; soccer; underdog;
    All these keywords.

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General

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