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Playing to your strength or overcoming your weakness: the role of effort substitutability in skill formation

Author

Listed:
  • Liqun Liu

    (Texas A&M University)

Abstract

This paper studies the allocation of a given time budget among a number of skill-building efforts to maximize an overall skill level. The main finding is that as an effort becomes relatively more effective, the time share of the effort should increase and the time shares of the other efforts should decrease (i.e., one should adopt the strategy of playing to your strength) if the elasticity of substitution is larger than one. However, the exact opposite is true (i.e., one should adopt the strategy of overcoming your weakness) if the elasticity of substitution is smaller than one.

Suggested Citation

  • Liqun Liu, 2014. "Playing to your strength or overcoming your weakness: the role of effort substitutability in skill formation," Economics Bulletin, AccessEcon, vol. 34(1), pages 99-105.
    • Handle: RePEc:ebl:ecbull:eb-13-00666
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    References listed on IDEAS

    as
    1. Chiswick, Barry R. & Miller, Paul W., 2003. "The complementarity of language and other human capital: immigrant earnings in Canada," Economics of Education Review, Elsevier, vol. 22(5), pages 469-480, October.
    2. Blackorby, Charles & Russell, R Robert, 1989. "Will the Real Elasticity of Substitution Please Stand Up? (A Comparison of the Allen/Uzawa and Morishima Elasticities)," American Economic Review, American Economic Association, vol. 79(4), pages 882-888, September.
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    More about this item

    Keywords

    Skills; Skill Formation; Elasticity of Substitution; Human Capital;
    All these keywords.

    JEL classification:

    • I2 - Health, Education, and Welfare - - Education

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