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Robert Reed, Karl Boulware and Ejnidu Ume
''Human Capital Investment under Quasi-Geometric Discounting''
( 2016, Vol. 36 No.4 )
Recent work by Laibson (1997) identifies that individuals are excessively impatient in the short-run, but wish to become more patient over time. It is often argued that such a time-inconsistency problem distorts individuals' savings decisions. The objective of this paper is to study human capital accumulation in the presence of a time-inconsistency problem. In doing so, we explain that many policies put into place to take advantage of the inter-personal benefits from human capital accumulation may also be important for resolving 'intra-personal' planning problems. Our results also shed light on the role of compulsory education.
Keywords: Human Capital, Quasi-Geometric Discounting
JEL: C6 - Mathematical Methods and Programming: General
E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment: General (includes Measurement and Data)
Manuscript Received : Sep 12 2016 Manuscript Accepted : Nov 09 2016

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