Investment in Human Capital and the Appropriate Discount Rate

Stephen Renas and Richard Cebula ()

MPRA Paper from University Library of Munich, Germany

Abstract: This study develops a theory of investment in human capital which rests on the assumption that an individual will choose to remain in school if the present value of the future income stream associated with additional education exceeds that associated with the present level of education. The paper hypothesizes that the marginal rate of time preference is a function of one's socioeconomic status and thereby provides a systematic framework for explaining dropout rates.

Keywords: investment in human capital; collective decision-making; rate of time preference; poverty; school drop-out rates (search for similar items in EconPapers)
JEL-codes: D11 D14 I24 (search for similar items in EconPapers)
Date: 1971-02-10
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in Social and Economic Studies 1.21(1972): pp. 61-71

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/51265/1/MPRA_paper_51265.pdf original version (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:pra:mprapa:51265

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().