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LIFETIME UNCERTAINTY, HUMAN CAPITAL AND PHYSICAL CAPITAL
Author(s) -
RAZIN ASSAF
Publication year - 1976
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.1976.tb00431.x
Subject(s) - economics , investment (military) , physical capital , human capital , capital (architecture) , microeconomics , return of capital , capital intensity , monetary economics , return on investment , market economy , investment performance , production (economics) , archaeology , politics , political science , law , history
This paper demonstrates that the non‐inheritability of human capital makes investment in it fundamentally different from investment in physical capital when lifetime is uncertain. A simple two‐period model is used to highlight the effect of lifetime uncertainty on the optimal investment in human capital with and without markets for life insurance.