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Financial Market in the Czech Republic and Human Capital Investment: Private Financing of Higher Education

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  • Václav Urbánek
  • Kateřina Maršíková-Nepolská

Abstract

In this paper we investigate the possibilities of investing in human capital at the financial market of the Czech Republic. In particular, the conditions for this investment would be different among individuals due to the difference of bequest amount and the credit market condition in financing the money for human capital investment or education. There is also higher risk for possible investors in determining individuals' income and in adverse selection. Our paper deals with the possibilities of avoiding these problems and we use our data from the survey of Czech universities students' earnings expectations collected during the years 2002 - 2004. We use expected returns to education of the Czech higher education students as a benchmark for creating student loans and human capital contracts models. Financial market and institutions should offer different ways of financial assistance. However, financial market of the Czech Republic is not prepared for this type of investment.

Suggested Citation

  • Václav Urbánek & Kateřina Maršíková-Nepolská, 2005. "Financial Market in the Czech Republic and Human Capital Investment: Private Financing of Higher Education," Prague Economic Papers, Prague University of Economics and Business, vol. 2005(2), pages 131-146.
    • Handle: RePEc:prg:jnlpep:v:2005:y:2005:i:2:id:258:p:131-146
    DOI: 10.18267/j.pep.258
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    References listed on IDEAS

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    1. George Psacharopoulos & Harry Anthony Patrinos, 2004. "Returns to investment in education: a further update," Education Economics, Taylor & Francis Journals, vol. 12(2), pages 111-134.
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    3. Jeff Dominitz & Charles F. Manski, 1996. "Eliciting Student Expectations of the Returns to Schooling," Journal of Human Resources, University of Wisconsin Press, vol. 31(1), pages 1-26.
    4. Polachek, Solomon W, 1995. "Earnings over the Life Cycle: What Do Human Capital Models Explain?," Scottish Journal of Political Economy, Scottish Economic Society, vol. 42(3), pages 267-289, August.
    5. Jacob A. Mincer, 1974. "Schooling and Earnings," NBER Chapters, in: Schooling, Experience, and Earnings, pages 41-63, National Bureau of Economic Research, Inc.
    6. T. Paul Schultz, 2003. "Human Capital, Schooling and Health Returns," Working Papers 853, Economic Growth Center, Yale University.
    7. Stepan Jurajda & Randall K. Filer & Jan Planovsky, 2001. "Returns to the Market: Valuing Human Capital in the Post- Transition Czech and Slovak Republics," Development and Comp Systems 0012012, University Library of Munich, Germany.
    8. Schultz, T. Paul, 2003. "Human capital, schooling and health," Economics & Human Biology, Elsevier, vol. 1(2), pages 207-221, June.
    9. Psacharopoulos, George (ed.), 1987. "Economics of Education," Elsevier Monographs, Elsevier, edition 1, number 9780080333793.
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    More about this item

    Keywords

    higher education; private universities; returns to investment; human capital contracts; tuition fee;
    All these keywords.

    JEL classification:

    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts

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