Skill Formation under Incomplete Information

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

No 2010_26, Discussion Paper Series of the Max Planck Institute for Research on Collective Goods from Max Planck Institute for Research on Collective Goods

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.

Keywords: Education; Skill Formation; Incomplete Information (search for similar items in EconPapers)
JEL-codes: D80 I21 J13 (search for similar items in EconPapers)
Date: 2010-06
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