Investment in Education

Abstract

The purpose of this paper is to present new measures of the benefits from education. These measures are based on the incremental effect on human wealth of participation in formal schooling. We define human wealth as the sum of lifetime labor incomes for all individuals in the U.S. population. These incomes include the value of time spent working and the value of nonmarket labor activities, which are defined to include parenting and the enjoyment of leisure. Our estimates of lifetime labor incomes are drawn from an extensive data base on income from work. We have enlarged this data base to incorporate the value of nonmarket activities. We compare our estimates of investment in education and human wealth with estimates based on the expenditures of educational institutions. We find that these expenditures are very much smaller than the benefits of education.

Hysteresis and full employment in a small open economy

“…An obvious empirical challenge confronting a theory of business cycles where human capital plays a central role is that no statistical agency currently maintains human capital accounts. This is in part due to controversies regarding measurement (see Fraumeni, 1989 and1992;Christian, 2010 andAbraham, 2010;McGrattan, 2010;and Fraumeni et al, 2015). Nonetheless our model suggests a relatively straightforward, albeit arguably narrow, way to empirically capture the value of human capital.…”

El impacto económico del trabajo autónomo en la Comunitat Valenciana

“…La idea se sustenta en que los salarios relativos de los individuos reflejan los diferentes valores de mercado de las empresas para diferentes tipos de trabajos, reflejando diferencias en capital humano y productividad. Los trabajos de Mulligan y Sala-i-Martin (1997 y Jorgenson y Fraumeni (1989a, 1989b se basan en este enfoque. El primero intenta medir la contribución de los servicios de capital humano a la producción en cada período dado en términos de trabajadores sin calificación (trabajadores sin educación ni experiencia).…”

What Factors in Nepal Account for the Rural–Urban Discrepancy in Human Capital? Evidence from Household Survey Data

“…The cost approach toward human capital measurement has been followed by, among others, Kendrick (1994), and Jorgenson and Fraumeni (1989). Here, researchers distinguish the investment and consumption aspects of education, in which investment builds human capital and consumption does not.…”