can speak the same language. The value of trade increases in each participant's level of education. We compare a bilingual … education system, under which the individuals who take education become bilingual, with a unilingual system, under which the … optimal when education levels are centralized. In the decentralized equilibrium, individuals (i) vote over education systems …

-relevant skills and institutions. We show that democracy and good governance complement market skills in transition economies. Under …

, spatial sorting of skills is at work and explains a great deal of spatial wage variability. We further show that this sorting … sorting of firms is instead quite weak. In the paper, we also find support of self-selection of migrants based on skills and a … size and workers' skills is not simply the outcome of a co-location phenomenon. …

for industry profitability. Although, high wages also appear to be associated with high labour skills and then with … amount of skilled labour. Given an underlying skills distribution, the model determines profits, wages and aggregate income … and welfare. Results show that high net wages due to a low skills endowment in the economy are typically associated with …

proportion of the workforce is unskilled, firms have little incentive to provide good jobs (requiring high skills and providing … high wages), and if few good jobs are available, workers have little incentive to acquire skills. In this context, the …