investment building skills. ] don’t see much avenue for investment in adult human capital except through textbooks and tuition. Some happens. I went back to school at the Conservatory myself, and I buy lots of textbooks. But I just don’t see enough of it around me. Models must simplify. Mine would end invested consumption at
independence more or less.
I would also model adult self-invested work as subliminal and costless job experience. I don’t see it as taking a second away from work for pay. This again is meant to describe the usual rule only. Ben-Porath’s model, I think, allows an impression that workers can choose between earning and learning by allocation of time. The quotes from Schultz in Chapter 5 described that as common. I just don’t see much of it happening. Rather we tend to work fewer hours at the end of careers,
not the beginning or middle when time for recovery of self-invested work remains.
I said that Ben-Porath’s equations imply
pay = realized work.
I would substitute the pay rule
gross realized work realized work + human depreciation = work - self-invested work + human depreciation, (6.17)
pay
as a norm or expectation. It isn’t a guaranteed outcome because deadweight loss happens to human capital too. We may be hit by a bus, or lose our jobs in a slump, or be sent to prison or drafted into the army. The pay rule means that recovery is foreseen. If (6.17) were stated in terms of outcomes, “recovered” would have to be
inserted before “human depreciation”.
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