Human Capital Investment and Labor Supply under Uncertainty
AbstractThe authors extend the theory of human capital investment under uncertainty by incorporating postinvestment labor supply as a choice variable. They show that human capital investment decreases in response to an increase in risk about its return if such investment is an inferior activity and preferences exhibit decreasing risk aversion. However, if investment is normal, then the effect of an increase in risk is indeterminate. These results highlight the importance of obtaining empirical evidence on the income elasticity of demand for human capital investment for arriving at refutable hypotheses about the effect of risk. Copyright 1990 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association in its journal International Economic Review.
Volume (Year): 31 (1990)
Issue (Month): 1 (February)
Contact details of provider:
Postal: 160 McNeil Building, 3718 Locust Walk, Philadelphia, PA 19104-6297
Phone: (215) 898-8487
Fax: (215) 573-2057
Web page: http://www.econ.upenn.edu/ier
More information through EDIRC
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Duran, Jorge & Rillaers, Alexandra, 2001. "Idiosyncratic risk, investment in human capital, and growth," CEPREMAP Working Papers (Couverture Orange) 0104, CEPREMAP.
- Maria Sarigiannidou & Theodore Palivos, 2012. "A Modern Theory of Kuznets’ Hypothesis," Working Papers 201202, Texas Christian University, Department of Economics.
- Luis Diaz-Serrano & J. Hartog, 2004. "Is there a Risk-Return Trade-off across Occupations? Evidence from Spain," Economics, Finance and Accounting Department Working Paper Series n1441004, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
- Christiansen, Charlotte & Nielsen, Helena Skyt, 2002.
"The Educational Asset Market: A Finance Perspective on Human Capital Investment,"
02-10, University of Aarhus, Aarhus School of Business, Department of Economics.
- Christiansen, Charlotte & Nielsen, Helena Skyt, 2003. "The Educational Asset Market: A Finance Perspective on Human Capital Investment," Finance Working Papers 02-9, University of Aarhus, Aarhus School of Business, Department of Business Studies.
- Diaz-Serrano, Luis & Hartog, Joop, 2004. "Is There a Risk-Return Trade-Off across Occupations? Evidence from Spain," IZA Discussion Papers 1355, Institute for the Study of Labor (IZA).
- Saïd Hanchane & David Touahri, 2004. "Human capital accumulation over the life cycle under multiple sources of uncertainty," Working Papers halshs-00010248, HAL.
- Neugart, Michael & Schömann, Klaus, 2002. "Employment outlooks: why forecast the labour market and for whom?," Discussion Papers, Research Unit: Labor Market Policy and Employment FS I 02-206, Social Science Research Center Berlin (WZB).
- repec:dgr:uvatin:2011045 is not listed on IDEAS
- Saïd Hanchane & A. Lioui & David Touahri, 2006. "Human capital as a risky asset and the effect of uncertainty on the decision to invest," Working Papers halshs-00010139, HAL.
- Iwahashi, Roki, 2007. "A theoretical assessment of regional development effects on the demand for general education," Economics of Education Review, Elsevier, vol. 26(3), pages 387-394, June.
- Rillaers, Alexandra, 1999. "Education and Income Inequality: The Role of a Social Protection System," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 1999017, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- Brit S. Schneider & Udo Schneider & Volker Ulrich, 2007. "Health and the Decision to Invest in Education," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 227(5+6), pages 725-745, December.
- Brent Kreider, 2008.
"Optimal Wage Taxation When Human Capital And Employment Are Endogenous,"
Western Economic Association International, vol. 46(4), pages 660-675, October.
- Kreider, Brent, 2008. "Optimal Wage Taxation When Human Capital and Employment Are Endogenous," Staff General Research Papers 12358, Iowa State University, Department of Economics.
- Park, Timothy A. & Lohr, Luanne, 2001. "Management Strategies And Human Capital Investments By Organic Producers," 2001 Annual meeting, August 5-8, Chicago, IL 20708, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Jorge Durán & Alexandra Rillaers, 2002. "Physical And Human Capital Investment: Relative Substitutes In The Endogenous Growth Process," Working Papers. Serie AD 2002-18, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or ().
If references are entirely missing, you can add them using this form.