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Investment in Hierarchical Human Capital

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  • Driskill, Robert A
  • Horowitz, Andrew W

Abstract

Advanced human capital requires "basic" human capital as an input. Physical capital does not, in general, have such hierarchical structure. This paper models optimal investment in hierarchical human capital as well as nonhierarchical physical capital. The authors analyze the steady state, transition dynamics, and endogenous growth properties of the system. The optimal program exhibits non-monotonicities in human capital stocks. This result has important implications for the optimal timing of investment in hierarchical human capital. The analysis also addresses the debate regarding the distribution of education expenditures and the divergence between ex-post and ex-ante rates of return to education. Copyright 2002 by Blackwell Publishing Ltd

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  • Driskill, Robert A & Horowitz, Andrew W, 2002. "Investment in Hierarchical Human Capital," Review of Development Economics, Wiley Blackwell, vol. 6(1), pages 48-58, February.
  • Handle: RePEc:bla:rdevec:v:6:y:2002:i:1:p:48-58
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    Cited by:

    1. Arcalean, Calin & Schiopu, Ioana, 2010. "Public versus private investment and growth in a hierarchical education system," Journal of Economic Dynamics and Control, Elsevier, vol. 34(4), pages 604-622, April.
    2. Abington, Casey & Blankenau, William, 2013. "Government education expenditures in early and late childhood," Journal of Economic Dynamics and Control, Elsevier, vol. 37(4), pages 854-874.
    3. Marisa Hidalgo-Hidalgo & Iñigo Iturbe-Ormaetxe, 2012. "Should we transfer resources from college to basic education?," Journal of Economics, Springer, vol. 105(1), pages 1-27, January.
    4. Nathalie Chusseau & Joël Hellier, 2011. "Educational Systems, Intergenerational Mobility and Social Segmentation," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 8(2), pages 203-233, December.
    5. Ben Mimoun, Mohamed & Raies, Asma, 2008. "Human capital investment and growth: A dynamic education model," MPRA Paper 9374, University Library of Munich, Germany.
    6. Su, Xuejuan & Kaganovich, Michael, 2012. "College Expansion and Curriculum Choice," Working Papers 2012-25, University of Alberta, Department of Economics, revised 01 Apr 2015.
    7. Su, Xuejuan, 2004. "The allocation of public funds in a hierarchical educational system," Journal of Economic Dynamics and Control, Elsevier, vol. 28(12), pages 2485-2510, December.
    8. Marisa Hidalgo-Hidalgo & Iñigo Iturbe-Ormaetxe, 2008. "Should we raise public expenditure on basic education and reduce expenditure at college?," Working Papers 08.11, Universidad Pablo de Olavide, Department of Economics.
    9. Robert Driskill & Andrew W. Horowitz & Fabio Méndez, 2009. "Hierarchical Human Capital and Economic Growth: Theory and Evidence," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 165(4), pages 723-743, December.
    10. Nathalie Chusseau & Joel Hellier, 2012. "Education, Intergenerational Mobility and Inequality," Working Papers 261, ECINEQ, Society for the Study of Economic Inequality.
    11. Brezis, Elise S. & Hellier, Joël, 2018. "Social mobility at the top and the higher education system," European Journal of Political Economy, Elsevier, vol. 52(C), pages 36-54.
    12. Viaene, Jean-Marie & Zilcha, Itzhak, 2013. "Public funding of higher education," Journal of Public Economics, Elsevier, vol. 108(C), pages 78-89.
    13. Hellier, Joël, 2017. "Stratified higher education,social mobility at the top and efficiency: The case of the French ‘Grandes écoles’," MPRA Paper 76724, University Library of Munich, Germany.
    14. Nathalie Chusseau & Joel Hellier, 2014. "Globalization and social segmentation," Working Papers 339, ECINEQ, Society for the Study of Economic Inequality.
    15. Chakraborty, Bidisha & Gupta, Manash Ranjan, 2009. "Human capital, inequality, endogenous growth and educational subsidy: A theoretical analysis," Research in Economics, Elsevier, vol. 63(2), pages 77-90, June.
    16. Andrietti, Vincenzo & Su, Xuejuan, 2016. "Education Curriculum and Student Achievement: Theory and Evidence," Working Papers 2016-12, University of Alberta, Department of Economics.
    17. David Welsch, 2012. "Affirmative Action in College Admission Decisions and the Distribution of Human Capital," Working Papers 12-02, UW-Whitewater, Department of Economics.
    18. Patron, Rossana & Vaillant, Marcel, 2011. "Public expenditure on education and skill formation: is there a simple rule to maximize skills?," MPRA Paper 46740, University Library of Munich, Germany.
    19. Mohamed Ben Mimoun, 2004. "On the role of inequalities and public education expenditures in human capital investment : a theoretical approach," Cahiers de la Maison des Sciences Economiques bla04094, Université Panthéon-Sorbonne (Paris 1).
    20. Rossana Patron & Marcel Vaillant, 2011. "Public expenditure on education and skill formation: are there simple rules to maximise skills?," Investigaciones de Economía de la Educación volume 6,in: Antonio Caparrós Ruiz (ed.), Investigaciones de Economía de la Educación 6, edition 1, volume 6, chapter 23, pages 387-397 Asociación de Economía de la Educación.
    21. Elisa S. Brezis & Joel Hellier, 2016. "Social Mobility and Higher-Education Policy," Working Papers 095, "Carlo F. Dondena" Centre for Research on Social Dynamics (DONDENA), Università Commerciale Luigi Bocconi.

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