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Investments in human capital, wage uncertainty, and public policy

Anderberg, Dan and Andersson, Fredrik LU (2003) In Journal of Public Economics 87(7-8). p.1521-1537
Abstract
The importance of risk characteristics of human capital for the design of tax and education policy is explored. Wages are uncertain and education, while increasing the expected wage, may increase or decrease wage variance. The government has strong reasons to encourage human capital formation in the latter case, partly due to the insurance effect of human capital, and partly due to the way the individuals-under a plausible restriction on 'prudence'-respond to changes in risk. The analysis is illustrated using two models of education: one where education helps the individuals make better occupational choices, and a standard risk-augmented Becker-type model.
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author
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
prudence, wage uncertainty, social insurance, education
in
Journal of Public Economics
volume
87
issue
7-8
pages
1521 - 1537
publisher
Elsevier
external identifiers
  • wos:000184745700008
  • scopus:0041841619
ISSN
0047-2727
DOI
10.1016/S0047-2727(01)00198-0
language
English
LU publication?
yes
id
1a00c115-e642-4f58-bcdf-8b7cf90ab6a9 (old id 900042)
date added to LUP
2008-01-10 09:18:31
date last changed
2018-05-29 11:50:13
@article{1a00c115-e642-4f58-bcdf-8b7cf90ab6a9,
  abstract     = {The importance of risk characteristics of human capital for the design of tax and education policy is explored. Wages are uncertain and education, while increasing the expected wage, may increase or decrease wage variance. The government has strong reasons to encourage human capital formation in the latter case, partly due to the insurance effect of human capital, and partly due to the way the individuals-under a plausible restriction on 'prudence'-respond to changes in risk. The analysis is illustrated using two models of education: one where education helps the individuals make better occupational choices, and a standard risk-augmented Becker-type model.},
  author       = {Anderberg, Dan and Andersson, Fredrik},
  issn         = {0047-2727},
  keyword      = {prudence,wage uncertainty,social insurance,education},
  language     = {eng},
  number       = {7-8},
  pages        = {1521--1537},
  publisher    = {Elsevier},
  series       = {Journal of Public Economics},
  title        = {Investments in human capital, wage uncertainty, and public policy},
  url          = {http://dx.doi.org/10.1016/S0047-2727(01)00198-0},
  volume       = {87},
  year         = {2003},
}