Human Capital Investment Strategies in Europe
25 Pages Posted: 28 May 2011
Date Written: 2011
Abstract
The paper analyses alternative investment policies and their consequences for the evolution of human capital in Europe based on a model of age dependent skill formation where the life span depends on investments during childhood. What makes the approach special is the analysis of the returns to education of alternative educational policies targeted at certain ages, countries, or productivity levels for two counterfactual policy regimes, one regime assuming the actual state of diversity and the other a unified Europe. Our results indicate that investments need to be directed more generally to people of younger ages in Europe. If equality is important enough additional investment should specifically be directed to disadvantaged individuals during childhood. Furthermore, high levels of life cycle income inequality and a high skill level increase the optimal amount of investments during younger adulthood. In a unified Europe, the effectiveness of policies to reduce inequality would be higher.
Keywords: Human capital investment, life cycle skill formation, welfare function, Europe
JEL Classification: D87, I12, I21, J13
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
The Effects of Cognitive and Noncognitive Abilities on Labor Market Outcomes and Social Behavior
By James J. Heckman, Jora Stixrud, ...
-
The Technology of Skill Formation
By Flavio Cunha and James J. Heckman
-
The Technology of Skill Formation
By Flavio Cunha and James J. Heckman
-
Interpreting the Evidence on Life Cycle Skill Formation
By Flavio Cunha, James J. Heckman, ...
-
Interpreting the Evidence on Life Cycle Skill Formation
By Flavio Cunha, James J. Heckman, ...
-
Estimating the Technology of Cognitive and Noncognitive Skill Formation
By Flavio Cunha, James J. Heckman, ...
-
Estimating the Technology of Cognitive and Noncognitive Skill Formation
By Flavio Cunha, James J. Heckman, ...
-
The Economics and Psychology of Personality Traits
By Lex Borghans, Angela Duckworth, ...
-
The Economics and Psychology of Personality Traits
By Lex Borghans, Angela Duckworth, ...