Risky human capital accumulation with endogenous skill premium

Karol Mazur

Economic Theory Bulletin, 2022, vol. 10, issue 2, No 8, 283-291

Abstract: Abstract I investigate the welfare properties of a model with risky human capital accumulation, imperfect substitution between skill types and endogenous skill premium. I show that whenever the insurance markets are incomplete, pecuniary externalities render the competitive equilibrium constrained inefficient with a sub-optimal level of human capital.

Keywords: Constrained inefficiency; Incomplete markets; General equilibrium (search for similar items in EconPapers)
JEL-codes: E24 H81 I22 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s40505-022-00233-3

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