Real Options and Human Capital Investment∗

  title={Real Options and Human Capital Investment∗},
  author={Bas Jacobs},
This paper extends the standard human capital model with real options. Real options affect investment behavior when risky investments in human capital are irreversible and individuals can affect the timing of the investment. Option values make individuals more reluctant to invest in human capital and required returns on the investment increase. Higher tax rates (or lower subsidies) depress human capital investments, but to a lesser extent than in the standard human capital model. A flat income… CONTINUE READING

From This Paper

Figures, tables, and topics from this paper.


Publications referenced by this paper.
Showing 1-10 of 31 references

Education Choice under Uncertainty and Public Policy”, University of Warwick: mimeo

  • V. Hogan, I. Walker
  • 2002
Highly Influential
5 Excerpts

Post-Secondary Fees and the Decision to Attend a University or a Community College

  • M. J. Hilmer
  • Journal of Public Economics,
  • 1998
Highly Influential
5 Excerpts

Schooling as a Risky Investment

  • J. Hartog
  • Proceedings of the Royal Dutch Academy of…
  • 2005
1 Excerpt

An Empirical Analysis of the Risk Properties of Human Capital Returns

  • I. Palacios-Huerta
  • American Economic Review,
  • 2004
3 Excerpts

Schooling, Family Background, and Adoption: Does Family Income Matter

  • E.J.S. Plug, W. Vijverberg
  • Economic Journal,
  • 2004
2 Excerpts

Human Capital Policy

  • P. M. Carneiro, J. J. Heckman
  • 2003
2 Excerpts

Risk and Market Frictions as Determinants of the Human Capital Premium, Brown University: mimeo

  • I. Palacios-Huerta
  • 2003
1 Excerpt

Similar Papers

Loading similar papers…