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Modelling Education Dynamics with Cliometric Foundations

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  • Claude Diebolt

Abstract

The numerous analogies in the literature on economics between monetary theory and education policy lead me to propose a new model inspired by the work of Dornbusch [1976] and transposed to a context of ‘diploma inflation’. Supposing the required job skills rigid in the short run, I show a significant over-education phenomenon and an overshooting of the wage penalties in starting jobs. After formal education has been completed, the new graduate cohorts, despite a more significant level of initial training and better salary prospects have to face, paradoxically and in comparison with the previous generations, a higher over-education extent over a long period.

Suggested Citation

  • Claude Diebolt, 2016. "Modelling Education Dynamics with Cliometric Foundations," Working Papers of BETA 2016-01, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    • Handle: RePEc:ulp:sbbeta:2016-01
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    More about this item

    Keywords

    Overshooting; Over-education; Education Economics; Economic Policy; Political Economy; Macroeconomic Dynamics; Cliometrics.;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I20 - Health, Education, and Welfare - - Education - - - General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • N3 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy

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