The Intergenerational Overlap and Human Capital Formation
AbstractWe propose a new microeconomic explanation for the divergent experiences of economies in forming human capital. We suggest that the positive effect of a longer life expectancy on human capital formation arises from two separate effects: a life-expectancy effect and a prolonged intergenerational overlap effect. We argue that the duration of the overlap between generations and the associated parental support can affect the marginal cost of human capital formation and hence its level: parental support is cheaper than market financing. We thus attribute the strong correlation between the formation of human capital and life expectancy not merely to a higher marginal benefit arising from a longer payback period but also to a lower marginal cost arising from a prolonged intergenerational overlap. We provide conditions under which a longer overlap results in a higher level of per-capita output.
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Bibliographic InfoPaper provided by Institute for Advanced Studies in its series Economics Series with number 152.
Length: 17 pages
Date of creation: Mar 2004
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Other versions of this item:
- Oded Stark & Yong Wang, 2005. "The Intergenerational Overlap and Human Capital Formation," Review of International Economics, Wiley Blackwell, vol. 13(1), pages 45-58, 02.
- D91 - Microeconomics - - Intertemporal Choice and Growth - - - Intertemporal Consumer Choice; Life Cycle Models and Saving
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Stark, Oded & Falk, Ita, 2000.
"Dynasties and Destiny: On the Roles of Altruism and Impatience in the Evolution of Consumption and Bequests,"
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- Stark, Oded & Falk, Ita, 2001. "Dynasties And Destiny: On The Roles Of Altruism And Impatience In The Evolution Of Consumption And Bequests," Discussion Papers 18749, University of Bonn, Center for Development Research (ZEF).
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- Carolina Arteaga Cabrales, 2011.
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ENSAYOS SOBRE POLÍTICA ECONÓMICA,
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