We show how comparisons between the within-twin correlations of human capital outcomes across identical and nonidentical twins can be used to identify the variability in the individual-specific component of endowments and the responsiveness of schooling to individual-specific endowments in the family and in the marriage market even when schooling is measured with error. Estimates from two twins samples indicate that 27 (42) percent of the variance in log earnings (obesity) is due to variability in individual-specific endowments, allocations of schooling reinforce specific endowments, and individual-specific earnings endowments of men and their wives' schooling are negatively associated.
We consider an overlapping generations model where heterogeneous agents take decisions on consumption and investment in education under the assumption of imperfect capital markets. We study how the introduction of a pay-as-you-go arid of a fully funded pension scheme affects output and lifetime opportunities, and then analyse the impact of a pension reform. The standard neutrality result for fully funded pension schemes does not hold in this framework. We establish the conditions under which a fully funded scheme is associated with a higher investment in human capital. We show that the transition path may involve poverty traps.
This article develops a model, with deferred compensation and severance pay, that predicts that workers bear all the costs and receive all the returns of human capital investments and that specific investments yield higher returns than general investments. This model also predicts that pensions, which efficiently defer compensation, will be positively related to specific investments. Evidence from the National Longitudinal Survey of Older Men confirms these predictions; participation in company-sponsored training programs, proxying for specific investments, increases the probability of pension receipt and the level of benefits. More general training outside the firm has much smaller effects on pensions.
This paper investigates the politico-economic impact of a society's age structure on the extent of public funding of education. Education subsidies serve to internalize positive spillovers of human capital investment, but redistribute resources from the working old to the non-working young, thus creating a conflict of interest between the two generations. The political process is characterized by a representative democracy. In the steady state, high rates of population growth lead to oversubsidization, while low rates lead to undersubsidization, relative to a lifetime income maximizing situation. Population aging leads to higher educational subsidies in the politico-economic equilibrium. Starting from a situation of undersubsidization, this raises lifetime incomes.
In this paper a distinction is made between human capital depreciation related to a worker's aging and depreciation due to the obsolescence of the worker's education. Schooling-specific obsolescence of human capital is incorporated in the Mincerian model of earnings, and it is shown how this obsolescence affects the worker's earnings profile. Using the Israeli 1983 Census we show that for 'high-tech' oriented industries (for which obsolescence is relatively important) obsolescence effects are more significant than for 'low-tech' oriented industries, and, consequently, the experience-earnings peak falls faster with increasing education in the former.
This article examines the relationship between demographic structure and the level of government spending on K-12 education. Panel data for the states of the United States over the 1960-1990 period suggests that an increase in the fraction of elderly residents in a jurisdiction is associated with a significant reduction in per-child educational spending. This reduction is particularly large when the elderly residents and the school-age population are front different racial groups. Variation in the size of the school-age population does nor result in proportionate changes in education spending, thus, students in states with larger school-age populations receive lower per-student spending than those in stares with smaller numbers of potential students. These results provide support for models of generational competition in the allocation of public sector resources. They also suggest that the effect of cohort size on government mediated transfers must be considered in analyzing how cohort size affects economic well-being.
This paper develops an endogenous growth model with an explicit gender choice to study interactions between gender bias and economic development. Both sex preference and differential human capital endowments are possible sources of gender bias. Human capital and sex ratios of men and women converge to values that are lower in the steady-state growth equilibrium than in the stagnant equilibrium when old-age support from children is absent, and lower than in the steady-state growth equilibrium when old-age support is present. The analysis shows the crucial role of perpetual growth in reducing gender gaps in terms of the sex ratio and human capital ratio of men and women. Simulation results mimic some important features in the time series of the US economy.
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