The Cost of School Time, Foregone Earnings, and Human Capital Formation

@article{Parsons1974TheCO,
  title={The Cost of School Time, Foregone Earnings, and Human Capital Formation},
  author={Donald O. Parsons},
  journal={Journal of Political Economy},
  year={1974},
  volume={82},
  pages={251 - 266}
}
  • D. O. Parsons
  • Published 1 March 1974
  • Economics
  • Journal of Political Economy
A simple educational investment model is used to demonstrate that, if students are subject to borrowing constraints, foregone earnings are not identical to schooling time costs, since students will sacrifice leisure as well as earnings. Direct measurement of schooling hours and work hours of young males reveals that at the high school level the bulk of school hours result from foregone leisure. A review of the foregone-earnings measures used in a number of major human capital studies is… Expand
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TLDR
The highest elasticities of demand are found to occur in the low-income strata and lower-middle ability quartile, suggesting that an efficient subsidy program should focus on these groups. Expand
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