Investment in U.S. Education and Training

60 Pages Posted: 4 Feb 2001 Last revised: 30 Sep 2010

See all articles by Jacob Mincer

Jacob Mincer

Columbia University, Graduate School of Arts and Sciences, Department of Economics; National Bureau of Economic Research (NBER)

Date Written: August 1994

Abstract

The current high rates of return to human capital stimulate a supply response via increased investments in education and training. The so increased human capital stock exerts downward pressures on the rates of return that reduce the skill differential in wages. This paper reports estimates of: the responses of investments in post-secondary education, measured by enrollments, to changes in the rate of return; responses of investment in job training, measured by incidence; and effects of accumulated human capital stocks, measured by educational attainment, on educational wage differentials. Enrollment responses and attainment effects are shown to be separated by a time lag of about a decade. The parameter estimates are based on annual CPS and NCES data, covering a recent 25 year period. If demands for human capital cease their acceleration, the rate of return is expected to decline about 25% over the current decade, judging by the estimated parameters and lags.

Suggested Citation

Mincer, Jacob, Investment in U.S. Education and Training (August 1994). NBER Working Paper No. w4844. Available at SSRN: https://ssrn.com/abstract=247719

Jacob Mincer (Contact Author)

Columbia University, Graduate School of Arts and Sciences, Department of Economics ( email )

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