Essays on the Economics of Education

The first chapter proposes a theory on how students’ social background affects school teaching and job opportunities. We study a set-up where students differ in ability and social background, and we analyse the interaction between a school and an employer. Students with disadvantaged background are penalised compared to other students: they receive less teaching and/or are less likely to be hired. A surprising result is that policy aiming to subsidise education for disadvantaged students might in fact decrease their job opportunities. The second chapter argues that assortative matching can explain over-education. Education determines individuals’ income and, due to the presence of assortative matching, the quality of the partner, who can be a colleague or a spouse. Thus an individual acquires some education to improve the expected partner’s quality. But since everybody does that, the expected partner’s quality does not increases and over-education emerges. Public intervention can solve over-education through a progressive income tax. The third chapter examines how higher education affects job and marital satisfaction. We build up a model with assortative matching where individuals decide whether to attend university both for obtaining job satisfaction and for increasing the probability to be matched with an educated partner. The theoretical results suggest that, as assortative matching increases, the number of educated individuals increases, their job satisfaction falls while their marital satisfaction increases. We test our model using the British Household Panel Survey data for the years 2003-2006. Our empirical findings support the theoretical results.