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Suppose there are two types or workers, type I and type II. Half the workforce is of each type. The productivity of a type I
Suppose there are two types or workers, type I and type II. Half the workforce is of each type. The productivity of a type I is $100 while the productivity of a type II is $40 An employer cannot observe a worker's type directly. Suppose the cost of a year of education is $35 to a type II and only $25 to a type I. Find the separating and pooling equilibria
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