Investment in Human Capital and the Appropriate Discount Rate

This study develops a theory of investment in human capital which rests on the assumption that an individual will choose to remain in school if the present value of the future income stream associated with additional education exceeds that associated with the present level of education. The paper hypothesizes that the marginal rate of time preference is a function of one's socioeconomic status and thereby provides a systematic framework for explaining dropout rates.

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Year of publication:	1971-02-10
Authors:	Renas, Stephen ; Cebula, Richard
Institutions:	Volkswirtschaftliche Fakultät, Ludwig-Maximilians-Universität München
Subject:	investment in human capital \| collective decision-making \| rate of time preference \| poverty \| school drop-out rates

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Extent:	application/pdf
Series:	MPRA Paper.
Type of publication:	Book / Working Paper
Notes:	Published in Social and Economic Studies 1.21(1972): pp. 61-71
Classification:	D11 - Consumer Economics: Theory ; D14 - Personal Finance ; i24
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011111701