The Demand for Labor by Educational Category

on the demand for different types of labor and, in fact, on their supplies,1 and this paper is an attempt to shed some light on the problem. In the first section of the paper various theoretical aspects of the problem are explored. In particular, the hiring decision of the individual profit-maximizing (and, in some cases, utility-maximizing) firm is examined to derive implications concerning the conditions under which relatively highly educated employees will be preferred to employees with relatively low educational attainment. This model is then combined with an aggregative model of individual educational choice to determine both the equilibrium distributions of educational attainment and the structure of rates of return to education. The second section