This paper offers a model of the interaction between composition of jobs and labour market regulation. Ex-post rent-sharing due to search frictions implies that ‘good’ jobs which have higher creation costs must pay higher wages. This wage differential distorts the composition of jobs, and in...

In May 1991, 15,000 Ethiopian Jews were brought to Israel in an overnight airlift and sorted in a haphazard and essentially random fashion to absorption centres across the country. This quasi-random assignment produced a natural experiment whereby the initial schooling environment of Ethiopian...

This paper offers and tests a theory of training whereby workers do not pay for general training they receive. The crucial ingredient in our model is that the current employer has superior information about the worker’s ability relative to other firms. This informational advantage gives the...

In Israel, as in many other countries, a high school matriculation certificate is required by universities and some jobs. In spite of the certificate’s value, Israeli society is marked by vast differences in matriculation rates by region and socioeconomic status. We attempted to increase the...

There is renewed interest in ways to enhance secondary education, especially among disadvantaged students. This study evaluates the short-term effects of a remedial education programme that provided additional instruction to under-performing high school students in Israel. The programme targeted...

Performance-related pay for teachers is being introduced in many countries, but there is little evaluation to date on the effects of such programmes. This Paper evaluates a particular incentive experiment. The incentive program is a rank-order tournament among teachers of English, Hebrew, and...

This paper uses the mass migration wave to Israel in the 1990s to examine the impact of immigrant concentration during elementary school on the long-term academic outcomes of native students in high school. To identify the causal effect of immigrant children on their native peers, the empirical...

In the standard model of human capital with perfect labor markets, workers pay for general training. When labor market frictions compress the structure of wages, firms may invest in the general skills of their employees. The reason is that the distortion in the wage structure turns...