"Standard theory predicts that holdup can be alleviated by making specific investments unobservable; private information creates an informational rent that boosts investment incentives. Empirical findings, however, indicate that holdup is attenuated by fairness and reciprocity motivations....

Standard economic theory identifies a trade-off between up-or-stay and up-or-out promotion rules. Up-or-stay never wastes the skills of those not promoted but may provide insufficient incentives to invest in skills. Up-or-out can always induce investment in skill acquisition but may waste the...

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 evaluates the long-term effects of class size in primary school. We use rich administrative data from Sweden and exploit variation in class size created by a maximum class size rule. Smaller classes in the last three years of primary school (age 10 to 13) are not only beneficial for...

This paper examines the earnings premium to computer use in a developing country: Ecuador. We use different approaches to examine whether the premium is causal. Controlling for an extensive set of observables, we find an earnings difference between users and non-users of around 20%. Using first...

This paper evaluates the long-term effects of class size in primary school. We use rich administrative data from Sweden and exploit variation in class size created by a maximum class size rule. Smaller classes in the last three years of primary school (age 10 to 13) are not only beneficial for...

This paper provides three pieces of analysis. First, an economic theory account of the reasons that governments may have to intervene in the maket for education is offered. This account is based on insights from both the neoclassical (market) paradigm and the information paradigm. Second, it...