Grant

Lifecycle Human Capital Investment, Borrowing Constraints and Risk

Human capital determines aggregate productivity, inequality, social mobility, and economic growth and development. Three problems arise in financing human capital investments. One, because individuals would like to borrow against future earnings to finance up-front schooling costs, “lifecycle” borrowing constraints may inhibit investment. Two, parents cannot pass debts on to their children, giving rise to intergenerational constraints that prevent low-income parents from investing in promising young children. And three, uncertainty in future earnings can limit incentives to invest. By developing and estimating a unified framework, we propose to design and evaluate new strategies that can address all three of these issues jointly.

 
Associate Professor
University of Western Ontario
Associate Professor
University of Western Ontario