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In this model of education, where individuals are exposed both to educational risk and to wage risk within the skilled sector, successful graduation depends both on individual effort to study and on public resources. We show that insuring the present risks is a dichotomic task: Wage risk is...
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human capital investment decision. Real option theory offers a new perspective of the human capital investment decision … discuss discontinuities and sheepskin effects within this approach. -- human capital theory ; uncertainty ; irreversibility …
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