Firm-Level Social Returns to Education

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IZA Seminar

Place: Schaumburg-Lippe-Str. 9, 53113 Bonn

Date: 24.05.2005, 12:15 - 13:30

   

Presentation by 

Pedro S. Martins (Queen Mary, University of London)
   

Abstract:

Do workers benefit from the education of their co-workers? This question is examined first by introducing a model of on-the-job schooling, which argues that educated workers may transfer part of their general skills to uneducated workers and that this spillover is affected by the degrees of non-excludability, irreversibility and generality of those skills. We then conduct an empirical analysis drawing on a matched panel of Portuguese firms and their workers. Schooling endogeneity is tackled by considering firm fixed effects and instruments based on schooling lags and the lagged share of retirement-age workers. We find evidence of large firm-level social returns (ranging between 14% and 23% and thus exceeding standard estimates of private returns) and of significant returns accruing to less educated workers but not to their more educated colleagues.

   
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