Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/20895 
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dc.contributor.authorBelzil, Christianen
dc.contributor.authorHansen, Jörgenen
dc.date.accessioned2009-01-28T16:17:39Z-
dc.date.available2009-01-28T16:17:39Z-
dc.date.issued1999-
dc.identifier.urihttp://hdl.handle.net/10419/20895-
dc.description.abstractUsing a dynamic programming model of schooling decisions, we investigate the relationshipbetween subjective discount rates and the labor market ability (the discount rate bias) on apanel taken from the National Longitudinal Survey of Youth (NLSY). Given householdhuman capital and Armed Forces Qualification test scores (AFQT), subjective discount rates,which vary between 1% and 5% per year, are found to be negatively correlated with labormarket ability. The true return to schooling is estimated around 6% per year. Estimatesobtained from a model where neither the ability bias nor the discount rate bias areconsidered, indicate that one percentage point can be imputed to the correlation betweendiscount rates and labor market ability and at least another percentage point can be imputedto the positive correlation between the per-period utility of attending school and labor marketability. The model is used to simulate the effects of an increase in the level of human capitalof one generation on both schooling attainments and labor market productivity of the nextgeneration. We find the true intergenerational education correlation to be relatively low; anincrease of 1 year in the average level of schooling will raise the level of human capital ofthe next generation by approximately 0.15 year of schooling and translates into a 1%productivity (wage) growth.en
dc.language.isoengen
dc.publisher|aInstitute for the Study of Labor (IZA) |cBonnen
dc.relation.ispartofseries|aIZA Discussion Papers |x60en
dc.subject.jelJ3en
dc.subject.jelJ2en
dc.subject.ddc330en
dc.subject.keywordIntergenerational transfersen
dc.subject.keywordreturns to educationen
dc.subject.keywordsubjective discount ratesen
dc.subject.keywordhuman capitalen
dc.subject.keywordschooling decisionsen
dc.subject.stwBildungsökonomiken
dc.subject.stwBildungsinvestitionen
dc.subject.stwBildungsertragen
dc.subject.stwAbzinsungen
dc.subject.stwPrivater Transferen
dc.subject.stwSchätzungen
dc.subject.stwUSAen
dc.titleSubjective Discount Rates, Intergenerational Transfers and the Return to Schooling-
dc.typeWorking Paperen
dc.identifier.ppn83406698Xen
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen

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