Job competition, employability and incentives for human capital formation

Shaked, Avner and Cristobal Campoamor, Adolfo (2014): Job competition, employability and incentives for human capital formation.

Abstract

This note describes the effects on human capital formation of rank-order tournaments offering identical prizes to a given share of the ranked contestants. This compensation scheme is thought to resemble the selection processes in different areas of the public administration, particularly in Southern European countries. In the presence of contestants with identical ability, the incentives for educational effort are highest when the variance of final returns is maximized.

• Item Type: MPRA Paper
• Language: English
• Keywords: Human capital formation, tournaments, benchmarking, public sector, employability
• Subjects: D - Microeconomics > D8 - Information, Knowledge, and Uncertainty; I - Health, Education, and Welfare > I2 - Education and Research Institutions; I - Health, Education, and Welfare > I2 - Education and Research Institutions > I24 - Education and Inequality; J - Labor and Demographic Economics > J0 - General > J08 - Labor Economics Policies

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