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Literacy traps: Society‐wide education and individual skill premia
Author(s) -
Atal Vidya,
Basu Kaushik,
Gray John,
Lee Travis
Publication year - 2010
Publication title -
international journal of economic theory
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.351
H-Index - 11
eISSN - 1742-7363
pISSN - 1742-7355
DOI - 10.1111/j.1742-7363.2009.00126.x
Subject(s) - human capital , literacy , economics , production (economics) , mechanism (biology) , function (biology) , trap (plumbing) , capital (architecture) , microeconomics , labour economics , market economy , economic growth , engineering , history , philosophy , archaeology , epistemology , evolutionary biology , environmental engineering , biology
Using a model of an O‐ring production function, the present paper demonstrates how certain communities can get caught in a low‐literacy trap in which each individual finds that it is not worthwhile investing in higher skills because others are not high‐skilled. The model sheds light on educational policy. It is shown that policy for promoting human capital has to take the form of a mechanism for solving the coordination failure in people's choice of educational strategy.