We use a business cycle model to analyze the general equilibrium implications of a representative agent's decision to devote time to skill acquisition activities, which are modeled as boosting subsequent labor productivity by increasing the stock of human capital. We use aggregate data on...

We consider the implications of expanding enrollment through lower standards in a model with human capital externalities and a market failure. Workers and firms make uncoordinated investment choices prior to random matching. Investment choices depend on the expected productivity of the...