%0 Report
        %A Gavrel, Frédéric
%A Lebon, Isabelle
%A Rebiere, Therese
        %T Formal Education Versus Learning-by-Doing
        %D 2014
        %8 2014 Jul
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 8341
        %U https://www.iza.org/publications/dp8341
        %X The efficiency of educational choices is studied in a search-matching model where individuals face a tradeoff: acquiring formal education or learning while on the job. When their education effort is successful, newcomers directly obtain a high-skill job; otherwise, they begin with a low-skill job, learn-by-doing and then search while on-the-job for a high-skill job. Low-skill firms suffer from hold-up behavior by high-skill firms. The low-skill sector is insufficiently attractive and individuals devote too much effort to formal education. A self-financing tax and subsidy policy restores market efficiency.
        %K formal education
%K learning-by-doing
%K market efficiency
%K on-the-job search
%K search unemployment