The paper examines the optimal level of training investment when trained workers are mobile, wage contracts are time-consistent, and training comprises both specific and general skills. It is shown that, in the absence of a social planner, the firm has ex-post monopsonistic power that drives...

We develop a model that gives some microfoundation to the impact of residential neighborhood on children’s educational attainment and then test it using the UK National Child Development Study. We find that, for high-educated parents, the better the quality of the neighborhood in terms of...

We investigate the racial gap in test scores between white and non-white students in Britain both in levels and differences across the school years. We find that there is a substantial racial gap in test scores, especially between ages 7 and 11, and a less severe one between ages 11 and 16. It...