Full-Time Schooling in Life-Cycle Models of Human Capital Accumulation | Zendy

Tim Wallace | Zendy; Loren A. Ihnen | Zendy

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Full-Time Schooling in Life-Cycle Models of Human Capital Accumulation

Author(s) -

Tim Wallace,

Loren A. Ihnen

Publication year - 1975

Publication title -

journal of political economy

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 21.034

H-Index - 186

eISSN - 1537-534X

pISSN - 0022-3808

DOI - 10.1086/260310

Subject(s) - economics , endowment , human capital , renting , labour economics , interest rate , investment (military) , physical capital , stock (firearms) , work (physics) , monetary economics , market economy , mechanical engineering , philosophy , epistemology , politics , political science , law , engineering

A reduced-form equation relating length of "formal schooling" to market, endowment, and ability parameters was derived for a life-cycle human capital accumulation model with alternative assumptions: (a) equal borrowing and lending rates and (b) no loans for human capital investment. Length of "formal schooling" increases when loans are unavailable. For both cases, length of "formal schooling" varies directly with length of work life, a Hicks-neutral "ability" index, and the ratio of the human capital rental rate to the price of associated inputs, and varies inversely with the discount rate, deterioration rate, and initial human capital stock.

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