On the Timing of Education
We propose a simple investment model which shows that, in the presence of fluctuations in and uncertainty about the opportunity cost of time, marginal individuals may choose to delay their education if the opportunity cost of time is temporarily high. Importantly, it is when the completion of the degree is uncertain, but likely enough that individuals will consider delaying their education. As a result, when returns to education are relatively low, education and timing of education will be sensitive to fluctuations in the opportunity cost of time. If return is high, delay is never optimal. These findings are supported by Swedish university enrolment patterns, and cross-country evidence on age of university freshmen.
|Date of creation:||16 Mar 2004|
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- Trostel, Philip & Walker, Ian & Woolley, Paul, 2002. "Estimates of the economic return to schooling for 28 countries," Labour Economics, Elsevier, vol. 9(1), pages 1-16, February.
- Griliches, Zvi, 1980. " Schooling Interruption, Work While in School and the Returns from Schooling," Scandinavian Journal of Economics, Wiley Blackwell, vol. 82(2), pages 291-303.
- Monks, James, 1997. "The impact of college timing on earnings," Economics of Education Review, Elsevier, vol. 16(4), pages 419-423, October.
- Sällström, Susanna & Sjogren, Anna, 2002.
"Trapped, Delayed and Handicapped,"
CEPR Discussion Papers
3335, C.E.P.R. Discussion Papers.
- Sjögren, Anna & Sällström, Susanna, 2004. "Trapped, Delayed and Handicapped," Working Paper Series 613, Research Institute of Industrial Economics.
- Audrey Light, 1995. "The Effects of Interrupted Schooling on Wages," Journal of Human Resources, University of Wisconsin Press, vol. 30(3), pages 472-502.
- Yoram Ben-Porath, 1967. "The Production of Human Capital and the Life Cycle of Earnings," Journal of Political Economy, University of Chicago Press, vol. 75, pages 352-352. Full references (including those not matched with items on IDEAS)