If the price effect of opening up a developing economy may be expected to act as a disincentive for investment in human capital, the opposite is likely to be true of the income effect, especially in the presence of credit market imperfections among the poor. It is shown in this Paper that this...

We propose a model of intergenerational transmission of education wherein children belong to either highly educated or low-educated families. Children choose the intensity of their social activities while parents decide how much educational effort to exert. Using data on adolescents in the...

We propose a model of intergenerational transmission of education wherein children belong to either highly educated or low-educated families. Children choose the intensity of their social activities while parents decide how much educational effort to exert. Using data on adolescents in the...

We investigate the racial gap in test scores between white and non-white students in Britain both in levels and differences across the school years. We find that there is a substantial racial gap in test scores, especially between ages 7 and 11, and a less severe one between ages 11 and 16. It...

We define an economy composed of two language groups. Value is created through bilateral trade between individuals who can speak the same language. The value of trade increases in each participant's level of education. We compare a bilingual education system, under which the individuals who take...

Two of the earliest inventions of a human capital-intensive technology were for the production of personal internal goods that enabled humans to derive more pleasure out of leisure, namely dance and music. I model the incentives to invent hobbies and to acquire hobby skills, and its implications...

In this paper, we investigate the role of young adult mortality on child labour and educational decisions. We argue that mortality risks are a major source of risks in returns to education in developing countries. We show that, in the absence of appropriate insurance mechanisms, the level of...

In this paper we examine the long term effects of socialization and segregation in schools, on labour market outcomes. We incorporate a model of “informational” peer influence by which beliefs of pupils are affected by exposure to other pupils’ posterior beliefs. Specifically, we focus on...