This paper studies a model where student effort and talent interact with parental and teachers' investments, as well as with school system resources. The model is rich, yet sufficiently stylized to provide novel implications. It can show, for example, that an improvement in parental outside...

This paper develops a model with increasing adult life expectancy as the driving force of the economic and demographic transition. We show that if parents invest their own time into children's human capital, rising adult life expectancy unambiguously increases fertility. With children educated...

This paper explores the idea that LDCs may face a human capital constraint in terms of having insufficient numbers of suitably educated people to be able to take advantage of technological innovations in the rich world. Technologically advanced sectors which operate under increasing returns to...

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...

We propose a signaling model of student enrollment dynamics based on probabilities of completion of studies, under different rationality assumptions. There are two types of students and two schools. School of graduation serves as a signal of student productivity to prospective employers. The...

This paper studies educational choices in a signaling setting in segmented labor markets. We show that in the presence of heterogeneous working ability imperfectly correlated with schooling costs, equilibria characterized by overeducation may arise. The quality of education is crucial in...

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...

We study self-selection in centralized school choice, a strategy that takes place when students submit preferences before knowing their priorities at schools. A student self-selects if she decides not to apply to some schools despite being desirable. We give a theoretical explanation for this...

I propose a model in which credentials, such as diplomas, are intrinsically valuable; a situation described as credentialism. The model overcomes an important criticism of signalling models by mechanically tying a worker’s wages to their productivity. A worker’s productivity is influenced by...

Measuring unobserved individual ability is a core challenge of the analysis of questions related to human capital development. For that purpose, concepts from psychology, predominantly measures of IQ have become established means in empirical economics. However, many issues of individual di...