Some Consequences of Low-Quality Schooling under Asymmetric Information

ABSTRACT: The substantial failure of many public programmes intended to increase job opportunities of youth via better education and training has been ascribed mainly to quantitative factors like mismatching or insufficient funds This paper takes a different perspective and concentrates on qualitative aspects It proposes a simple analytical scheme designed to study the consequences of low quality education on the performance of the policy created educational organisations under asymmetric information The model considers two types of schools (high quality H and low quality B) and asks whether there is any room left for the low quality one It is found that an adverse selection process may start within the pool of applicants to school B even under very favourable demand conditions and that any worsening of these conditions lowers the equilibrium average quality of type B graduates Eventually the market for type B certificates may disappear     

Hierarchical clustering and matrix completion for the reconstruction of world input–output tables

Multi-regional input–output (I/O) matrices provide the networks of within- and cross-country economic relations. In the context of I/O analysis, the methodology adopted by national statistical offices in data collection raises the issue of obtaining reliable data in a timely fashion and it makes the reconstruction of (parts of) the I/O matrices of particular interest. In this work, we propose a method combining hierarchical clustering and matrix completion with a LASSO-like nuclear norm penalty, to predict missing entries of a partially unknown I/O matrix. Through analyses based on both real-world and synthetic I/O matrices, we study the effectiveness of the proposed method to predict missing values from both previous years data and current data related to countries similar to the one for which current data are obscured. To show the usefulness of our method, an application based on World Input–Output Database (WIOD) tables—which are an example of industry-by-industry I/O tables—is provided. Strong similarities in structure between WIOD and other I/O tables are also found, which make the proposed approach easily generalizable to them.