Ben Porath, Yoram (1937–1992)
Yoram Ben Porath’s paper ‘The Production of Human Capital and the Life Cycle of Earnings’ (1967) is still regarded as one of the path-breaking papers in the economics of human resources. Following Mincer and Becker, the paper uses the framework of optimum control to analyse the joint decision of investment in human capital and market work over the life cycle. Diminishing marginal productivity in the investment process results in the process being spread over a lengthy period of time. A shrinking horizon results in the time devoted to the investment diminishing over the life cycle, an increasing fraction of time being diverted to market work. The model, part of Ben Porath’s doctoral dissertation, provides an elegant economic explanation for the concentration of formal studies (that is, ‘full-time’ investment) early in life, and the concave shape of the age-earning profile.