Self-Investment in Schooling and Training

Abstract

The underlying notion of the human-capital model is the possibility of achieving an enhanced income flow in future years, at the cost of self-investment in human-capital ‘assets’ in the present or more immediate future. The rational individual will continue to invest in his own human capital so long as the expected net present value of these investments is positive, given his time preference rate and the marginal rate of return on the best alternative investment.