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Skill Formation under Incomplete Information

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  • Philipp Weinscheink

    (Max Planck Institute for Research on Collective Goods, Bonn)

Abstract

We consider an economic model of child development with multiple stages. Due to incomplete information, parents are not able to tailor their investments to their child’s type when the child is young. We show that incomplete information weakens the importance of early investments in children when inter-stage investments are easily substitutable, but strengthens them when substitution is difficult. The latter case is empirically relevant.

Suggested Citation

  • Philipp Weinscheink, 2010. "Skill Formation under Incomplete Information," Discussion Paper Series of the Max Planck Institute for Behavioral Economics 2010_26, Max Planck Institute for Behavioral Economics.
    • Handle: RePEc:mpg:wpaper:2010_26
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    References listed on IDEAS

    as
    1. James Heckman & Flavio Cunha, 2007. "The Technology of Skill Formation," American Economic Review, American Economic Association, vol. 97(2), pages 31-47, May.
    2. Daron Acemoglu, 2002. "Directed Technical Change," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 69(4), pages 781-809.
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    Keywords

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    JEL classification:

    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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