Human Capital Accumulation and Life-cycle Earning

Bo Zhang () and Zhixiang Zhang
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Bo Zhang: School of Economics, Peking University

Annals of Economics and Finance, 2019, vol. 20, issue 2, 611-631

Abstract: We investigate optimal time allocation between human capital accumulation and wage earning in dynamic settings. We present closed form solutions (modified MRAP) and find a remarkable difference between deterministic and stochastic exponential horizons. If death date is known, time during the early years is devoted to learning, then allocated between learning and working at a suitable constant ratio, then devoted solely to working until death; if death date is unknown, then, after an early-years period of pure learning, time is allocated between learning and working according to a suitable constant ratio forever.

Keywords: Human capital; Wage earning; Random life; MRAP; HJB equation (search for similar items in EconPapers)
JEL-codes: C61 E10 I20 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:cuf:journl:y:2019:v:20:i:2:zhangzhang

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