This paper examines the relationship between the incentives to work and to invest in human capital through education in a lifecycle optimizing model. These incentives are shown to be mutually reinforcing in a simple stylized model. This theoretical prediction is investigated empirically using...

Numerous studies have documented disproportionate increases in wage rates from receiving educational credentials, as opposed to from just years of education. This study shows 'sheepskin effects' in hours of work that are similar to the sheepskin effects in wage rates. Systematic sheepskin...

This study examines a crucial assumption in much of the recent work on endogenous growth, namely, constant returns to scale in producing human capital. A simple model is constructed to show that the returns to scale in human capital production can be inferred from the relationship between the...

An efficiency argument for public subsidies to education is proposed in this study. Subsidizing education is shown to be welfare improving because it makes the tax system less distortionary. Income taxation causes a less than efficient amount of investment in human capital, and induces an...