Stay in school or start working? : the human capital investment decision under uncertainty and irreversibility
As the time of leaving school determines the level of academic achievement this timing decision is central for the human capital investment decision. Real option theory offers a new perspective of the human capital investment decision under uncertainty and irreversibility. Unlike other approaches we include accumulative schooling costs, and provide a full analytical discussion of all determinants of the decision to terminate education and enter the labor market. Further, as we are able to look at a sequence of formal qualification levels, each characterized by various cost and income profiles we can discuss discontinuities and sheepskin effects within this approach.
Year of publication: |
2009
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Authors: | Bilkic, Natasa ; Gries, Thomas ; Pilichowski, Margarethe |
Publisher: |
Munich : Center for Economic Studies and ifo Institute (CESifo) |
Subject: | Bildungsverhalten | Absolventen | Entscheidung bei Unsicherheit | Irreversibility of Investment | Bildungsinvestition | Realoption | Theorie | human capital theory | uncertainty | irreversibility |
Saved in:
freely available
Series: | CESifo Working Paper ; 2825 |
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Type of publication: | Book / Working Paper |
Type of publication (narrower categories): | Working Paper |
Language: | English |
Other identifiers: | 612878481 [GVK] hdl:10419/30651 [Handle] |
Classification: | J24 - Human Capital; Skills; Occupational Choice; Labor Productivity ; D81 - Criteria for Decision-Making under Risk and Uncertainty ; I20 - Education. General |
Source: |
Persistent link: https://www.econbiz.de/10010266045