Policies need not only to be well designed to effectively address market failures, but their parameters also need to be part of agents' information sets. This is illustrated by government student loans in the Netherlands which are intended to alleviate liquidity constraints. Despite generous...

This paper explores the hypothesis that wage differentials between skill groups across countries are consistent with a demand and supply framework. Using micro data from 15 countries we find that about one third of the variation in relative wages between skill groups across countries is...

This paper explores the hypothesis that wage differentials between skill groups across countries are consistent with a demand and supply framework. Using micro data from 15 countries we find that about one third of the variation in relative wages between skill groups across countries is...

Standard economic theory predicts that firms will not invest in general training and will underinvest in specific training. Empirical evidence, however, indicates that firms do invest in general training of their workers. Evidence from laboratory experiments points to less underinvestment in...

Breach remedies serve an important role in protecting relationship-specific investments. Theory predicts that some common remedies protect too well and induce overinvestment, either though complete insurance against potential separation or the possibility that breach is prevented by increasing...

Standard economic theory predicts that firms will not invest in general training and will underinvest in specific training. Empirical evidence, however, indicates that firms do invest in general training of their workers. Evidence from laboratory experiments points to less underinvestment in...

Existing field evidence on rank-order tournaments typically does not allow disentangling incentive and sorting effects. We conduct a field experiment illustrating the confounding effect. Students in an introductory microeconomics course selected themselves into tournaments with low, medium, or...

This paper estimates the effects of attending medical school on health outcomes by exploiting that admission to medical school in the Netherlands is determined by a lottery. Among the applicants for medical school, people who attended medical school have on average 1.5 more years of completed...