Working Paper: CEPR ID: DP2398
Authors: Juan J. Dolado; Florentino Felgueroso; Juan F. Jimeno
Abstract: This paper examines the empirical evidence regarding the poor performance of the youth labour market in Spain over the last two decades, which entails very high unemployment for both higher and lower educated workers, symptoms of over-education, and low intensity of on-the-job training. It also presents a simple matching model with two types of workers ('educated' and ''non-educated') and two types of jobs ('skilled' and 'unskilled'), under which educated workers may crowd-out non-educated workers from their traditional entry jobs, showing that a combination of an increase in the relative supply of higher educated workers and rigid labour market institutions harms the training and labour market prospects of lower educated workers, while it raises the proportion of higher educated workers performing low-skill jobs.
Keywords: matching; crowding out; returns to education
JEL Codes: J63; J64
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Increase in the relative supply of higher educated workers (J24) | Negative impact on employment prospects of lower educated workers (F66) |
| Higher educated workers (J24) | Crowding out of lower educated workers (J69) |
| Crowding out of lower educated workers (J69) | Reduced training opportunities for lower educated workers (J24) |
| Higher educated workers (J24) | Reduced training opportunities for lower educated workers (J24) |
| Educational upgrading in Spain (I23) | High unemployment rates among both higher and lower educated workers (J69) |