An Optimal-Control-Theory Approach to the Education-Investment Decision

Lawrence Southwick and Stanley Zionts
Additional contact information
Lawrence Southwick: State University of New York at Buffalo, Buffalo, New York
Stanley Zionts: State University of New York at Buffalo, Buffalo, New York

Operations Research, 1974, vol. 22, issue 6, 1156-1174

Abstract: This paper presents an optimal-control-theory model that maximizes the present value of future earnings for an individual—particularly a poor one. Income is assumed to be a function of age and education level, and the rate of schooling is the control variable. A linear tax function is assumed that admits a negative income tax. In spite of numerous difficulties in measuring certain parameters, regression analysis is used to fit income data to age and education level. Then some specific functions for the optimal education plan are derived for different parameter values. The sensitivity of the model to changes in certain controllable and noncontrollable parameters is analyzed, and some implications for government policy are found.

Date: 1974
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://dx.doi.org/10.1287/opre.22.6.1156 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:oropre:v:22:y:1974:i:6:p:1156-1174

Access Statistics for this article

More articles in Operations Research from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().