We model educational investment, wages and employment status (full-time, part-time or non-participation) in a frictional world in which heterogeneous workers have different productivities, both at home and in the workplace. We investigate the degree to which there might be under-employment and...

This paper considers optimal educational investment and labour supply with increasing returns to scale in the earnings function In so doing we develop the work of Rosen (1983), who first highlighted the increasing returns argument that arises because private returns to human capital investment...

We model educational investment and labour supply in a competitive economy with home and market production. Heterogeneous workers are assumed to have different productivities both at home and in the workplace. Following Rosen (1983), we show that there are private increasing returns to education...