This paper explores the role of marriage when markets are incomplete so that individuals cannot diversify their idiosyncratic labor income risk. Ceteris paribus, an individual would prefer to marry a hedge (i.e. a spouse whose income is negatively correlated with her own) as it raises her...

In a model on population and endogenous technological change, Kremer combines a short-run Malthusian scenario where income determines the population that can be sustained, with the Boserupian insight that greater population spurs technological change and can therefore lift a country out of its...

We investigate externalities in higher education enrollment over the course of development in a two-sector model. Each sector works with only one type of labor, skilled or unskilled, and individuals are differentiated according to their cost of acquiring human capital. Both sectors exhibit...

While the effect of social security systems on retirement decisions has received much attention, the impact of these systems on individuals incentives to invest in their human capital has not been analyzed. We integrate human capital investment and retirement decisions in a simple analytical...

The paper introduces a welfarist approach to the national safety of a nation with membership in a defense alliance as an option. The members are risk averse but heterogeneous in their safety classification. There are two public goods as insurance devices, the domestic military budget and the...

This paper studies the role of public policy to promote efficiency in human capital accumulation in the representative agent framework. Agents accumulate human capital by spending time in home study and in publicly provided schools. The individual faces an aggregate externality in the...

In many professional labor markets the number of new workers follows a cyclical time path. This phenomenon is usually explained by means of a cobweb model that is based on the assumptions of myopic wage expectations and occupational immobility. Since both assumptions are questioned by the...

Empirical studies show that years of schooling are positively correlated with good health. The implication may go from education to health, from health to education, or from factors that influence both variables. We formalize a model that determines an individual's demand for knowledge and...

Justification for policies to encourage investments in education, particularly for individuals at the lower end of the ability distribution, may be provided by behavioural economics. We present a prototypical model where individuals who are potentially loss averse around their expected outcome...

We investigate the relationship between inequality and political support for public education funding in a model of endogenous fertility and school choice. Household income heterogeneity is consistent with the skewness of empirical income distributions. Inequality can drive education spending in...