Human Capital Acquisition and Occupational Choice: Implications for Economic Development.

ABSTRACT: Using household-level data from Mexico we document patterns among schooling, entrepreneurial decisions and household characteristics such as assets, talent of household members and age of the household head. Motivated by our findings, we develop a heterogeneous-agent, incomplete-markets, overlapping-generations dynasty model. Households jointly decide over their life cycle on (i) kids' human capital investments (schooling) and (ii) parents' entry, exit and investment into alternative entrepreneurial modes (subsistence and modern). With financial constraints all of these are co-determined. A calibrated version of our model can account for the broad correlation patterns uncovered in the data within and across generations, e.g., a non-monotonic relationship between educational c

SUBMITTER: Mestieri M 

PROVIDER: S-EPMC6697426 | biostudies-literature | 2017 Apr

REPOSITORIES: biostudies-literature