Human Capital Investment under Quasi-Geometric Discounting

Karl Boulware, Robert Reed (dong.rreed@cba.ua.edu) and Ejindu Ume (umee@miamioh.edu)
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Robert Reed: Department of Economics, Finance, and Legal Studies, University of Alabama
Ejindu Ume: Department of Economics, Miami University

No 2016-003, Wesleyan Economics Working Papers from Wesleyan University, Department of Economics

Abstract: Recent work by Laibson (1997) identifies that individuals are excessively impatient in the short-run, but wish to become more patient over time. It is often argued that such a time-inconsistency problem distorts individuals’ savings decisions. The objective of this paper is to study human capital accumulation in the presence of a time-inconsistency problem. In doing so, we explain that many policies put into place to take advantage of the inter-personal benefits from human capital accumulation may also be important for resolving ‘intra-personal’ planning problems. Our results also shed light on the role of compulsory education.

Keywords: Human Capital; Quasi-Geometric Discounting (search for similar items in EconPapers)
JEL-codes: C6 E2 I2 (search for similar items in EconPapers)
Pages: 8 pages
Date: 2016-08
New Economics Papers: this item is included in nep-edu
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http://repec.wesleyan.edu/pdf/kboulware/2016003_boulware.pdf (application/pdf)

Related works:
Journal Article: Human Capital Investment under Quasi-Geometric Discounting (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:wes:weswpa:2016-003

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