This paper uses a model of human capital accumulation, labour market distortions, wordof-mouth communication, and community formation to analyse socio-economic stratification, educational choices and intergenerational social mobility. Workers obtain information about job opportunities from...

This paper uses a model of search unemployment to discuss the interaction between publicly provided insurance and informal insurance through voluntary income sharing, e.g., between spouses. Income sharing reduces the optimal level of public unemployment insurance. While it is always individually...

Justification for policies to encourage investments in education, particularly for individuals at the lower end of the ability distribution, may be provided by behavioural economics. We present a prototypical model where individuals who are potentially loss averse around their expected outcome...