This paper reviews the stylized facts regarding the distribution of human capital investments and the returns to those investments in developing countries. It then examines recent evidence regarding which policies can induce increased human capital investments in the most efficient manner, using...

A pay-as-you-go pension scheme is associated with positive externalities of having children and providing them with human capital. In a framework with heterogeneity in productivity, and stochastic and endogenous investment in fertility and education, we discuss internalization policies...