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The accumulation of human capital: alternative methods and why they matter


  • Murat F. Iyigun
  • Ann L. Owen


We show how the ability to accumulate human capital through formal education and through a learning-by-doing process that occurs on the job affects the dynamic behavior of the human capital stock under a liquidity-constrained and a non-constrained case. When there are alternatives to formal schooling in the accumulation of human capital, investing resources in increasing school enrollment rates in low-income countries may not be the most efficient means of increasing the human capital stock. In addition, removal of liquidity constraints may not be sufficient to escape a development trap.

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  • Murat F. Iyigun & Ann L. Owen, 1996. "The accumulation of human capital: alternative methods and why they matter," International Finance Discussion Papers 551, Board of Governors of the Federal Reserve System (U.S.).
  • Handle: RePEc:fip:fedgif:551

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    1. Pritchett, Lant, 1996. "Where has all the education gone?," Policy Research Working Paper Series 1581, The World Bank.
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    Human capital;


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