Human capital investment strategies in Europe


Pfeiffer, Friedhelm ; Reuß, Karsten


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URL: http://ub-madoc.bib.uni-mannheim.de/3184
URN: urn:nbn:de:bsz:180-madoc-31840
Document Type: Working paper
Year of publication: 2011
Publication language: German
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: D87 I12 I21 J13 ,
Subject headings (SWD): Europäische Union , Bildungsinvestition , Bildungspolitik , Lebensdauer , Bildungsertrag , Wohlfahrtsfunktion
Keywords (English): Human capital investment , life cycle skill formation , welfare function , Europe
Abstract: The paper analyses alternative investment policies and their consequences for the evolution of human capital in Europe based on a model of age dependent skill formation where the life span depends on investments during childhood. What makes the approach special is the analysis of the returns to education of alternative educational policies targeted at certain ages, countries, or productivity levels for two counterfactual policy regimes, one regime assuming the actual state of diversity and the other a unified Europe. Our results indicate that investments need to be directed more generally to people of younger ages in Europe. If equality is important enough additional investment should specifically be directed to disadvantaged individuals during childhood. Furthermore, high levels of life cycle income inequality and a high skill level increase the optimal amount of investments during younger adulthood. In a unified Europe, the effectiveness of policies to reduce inequality would be higher.
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Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.




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Pfeiffer, Friedhelm ; Reuß, Karsten (2011) Human capital investment strategies in Europe. Open Access [Working paper]
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