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ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >
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http://hdl.handle.net/10419/30651
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| Title: | | Stay in school or start working? : the human capital investment decision under uncertainty and irreversibility  |
| Authors: | | Bilkic, Natasa Gries, Thomas Pilichowski, Margarethe |
| Issue Date: | | 2009 |
| Series/Report no.: | | CESifo working paper 2825 |
| Abstract: | | 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. |
| Subjects: | | human capital theory uncertainty irreversibility |
| JEL: | | J24 D81 I20 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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