We apply the theory of real options to the problem of education choice when returns to education are uncertain. We show that the length of time spent in school will be an increasing function of the risk associated with education and not just the expected return. This fact has been neglected in...

This paper is concerned with the relationship between education, wages and working behaviour. The work is partly motivated by the sharp distinction in the literature between the returns to education and the effect of wages on labour supply. Education is the investment that cumulates in the form...