humancapitaleducationandearnings.pptVIP

THE AGE-EARNINGS PROFILE IMPLIED BY HUMAN CAPITAL THEORY Dollars Age-Earnings Profile Age The age-earnings profile is upward-sloping and concave. Older workers earn more because they invest less in human capital and because they are collecting the returns from earlier investments. The rate of growth of earnings slows down over time because workers accumulate less human capital as they get older. * SCHOOLING AND EARNINGS WHEN WORKERS HAVE DIFFERENT RATES OF DISCOUNT Years of Schooling Years of Schooling Rate of Interest 12 12 11 11 rBO rAL MRR Dollars wDROP PAL PBO wHS * SCHOOLING AND EARNINGS