Ability, Heterogeneity, and Parental Choices on Human Capital

이질적 학습능력과 인적자본에 대한 부모의 교육투자 선택

  • Hwang, Jin-tae (Department of Economics, Daegu University) ;
  • Kim, Sung-min (School of Economics and Trade, Kyungpook National University)
  • 황진태 (대구대학교 경제학과) ;
  • 김성민 (경북대학교 경제통상학부)
  • Received : 2017.09.07
  • Accepted : 2017.12.01
  • Published : 2017.12.31

Abstract

This paper shows that when children's ability is heterogeneous, a parent's choices about educational expenditures and fertility follow a pooling equilibrium or a separating equilibrium. Which of the two equilibria will prevail depends on the probability of getting a high-ability child as well as productivity differentials in producing children's adult human capital. Adopting the model of Acemoglu's (1999), this paper presents that the outcome of the pooling choice in the pooling regime and the outcome of the separating choice in the separating regime make the growth rate of human capital higher than otherwise. In addition, as the probability of a high-ability child increases, the growth rate of human capital in the separating equilibrium exceeds that in the pooling equilibrium.

Acknowledgement

Supported by : Daegu University

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