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Analysis of Ayers’ Model of Human Capital Investment with Political Risk and its Application to the U.S.—Mexico Border Area

In: North American Free Trade Agreement

Author

Listed:
  • Jane LeMaster
  • Bahman Ebrahimi

Abstract

In this chapter Ayers’ model of human capital investment will be discussed and its applicability to the Texas-Mexico borderland will be investigated. Ayers (1988) suggests that because of the political risks associated with borderland economies there may be less incentive for human capital investment. Human capital investment is defined as the investment in an individual’s training or education made by either the employer or the individual. Following the analysis by Flanagan et al. (1989), an internal rate of return method of analysis will be applied to Ayers’ model. Four propositions will be presented and discussed.

Suggested Citation

  • Jane LeMaster & Bahman Ebrahimi, 1993. "Analysis of Ayers’ Model of Human Capital Investment with Political Risk and its Application to the U.S.—Mexico Border Area," Palgrave Macmillan Books, in: Khosrow Fatemi (ed.), North American Free Trade Agreement, chapter 16, pages 196-205, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-1-349-22976-5_16
    DOI: 10.1007/978-1-349-22976-5_16
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