This paper examines the impact of labor market institutions covering the risk of unemployment on the nature of educational investment. We offer a matching model of unemployment in which individuals of a given education determine the scope (or adaptability) and intensity (or productivity) of...

Should education become more vocational or more general? We address this question in two steps. We first build and solve a two-sector matching model with generalists and specialists. Generalists pursue jobs in both sectors; however, they come second in job queues. Specialists seek for jobs in a...

In a frictional environment, technological complexity creates adaptability returns to schooling. This paper provides microfoundations to such an argument, and revisits the impacts of worker heterogeneity and risk aversion. In our model, firms and workers are located on a knowledge space....