Lifetime Earnings, Discount Rate, Ability and the Demand for Post-compulsory Education in Men in England and Wales

(2002) - Daniel Johnson

Journal: Bulletin of Economic Research
Link:: https://onlinelibrary.wiley.com/doi/10.1111/1467-8586.00151
DOI:: 10.1111/1467-8586.00151
Links::
Tags:: #paper #NCDS #Attainment #Gender
Cite Key:: [@johnsonLifetimeEarningsDiscount2002]

Abstract

Human capital theory suggests educational investments are made based on expected returns over the lifetime. Most other work in this field, particularly using British data, is based on demand models estimated in reduced form, with no earnings measures, or crudely constructed earnings measures, based on one or two earnings observations per individual.

Notes

“Our results show that expected earnings profiles vary according to observed ability and educational choice.” (Johnson, 2002, p. 233)

“Social class is found to be a particularly strong determinant of education demand. The lower social classes are much less likely to undertake post-compulsory education” (Johnson, 2002, p. 246)