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On the Timing of Education

Author

Listed:
  • Sjögren, Anna

    (The Research Institute of Industrial Economics)

  • Saez-Marti, Maria

    (The Research Institute of Industrial Economics)

Abstract

We propose a simple investment model which shows that, in the presence of fluctuations in and uncertainty about the opportunity cost of time, marginal individuals may choose to delay their education if the opportunity cost of time is temporarily high. Importantly, it is when the completion of the degree is uncertain, but likely enough that individuals will consider delaying their education. As a result, when returns to education are relatively low, education and timing of education will be sensitive to fluctuations in the opportunity cost of time. If return is high, delay is never optimal. These findings are supported by Swedish university enrolment patterns, and cross-country evidence on age of university freshmen.

Suggested Citation

  • Sjögren, Anna & Saez-Marti, Maria, 2004. "On the Timing of Education," Working Paper Series 614, Research Institute of Industrial Economics.
    • Handle: RePEc:hhs:iuiwop:0614
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    References listed on IDEAS

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    1. Trostel, Philip & Walker, Ian & Woolley, Paul, 2002. "Estimates of the economic return to schooling for 28 countries," Labour Economics, Elsevier, vol. 9(1), pages 1-16, February.
    2. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, June.
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    4. Jacob A. Mincer, 1974. "Schooling and Earnings," NBER Chapters, in: Schooling, Experience, and Earnings, pages 41-63, National Bureau of Economic Research, Inc.
    5. Sällström, Susanna & Sjogren, Anna, 2002. "Trapped, Delayed and Handicapped," CEPR Discussion Papers 3335, C.E.P.R. Discussion Papers.
    6. Monks, James, 1997. "The impact of college timing on earnings," Economics of Education Review, Elsevier, vol. 16(4), pages 419-423, October.
    7. Audrey Light, 1995. "The Effects of Interrupted Schooling on Wages," Journal of Human Resources, University of Wisconsin Press, vol. 30(3), pages 472-502.
    8. Yoram Ben-Porath, 1967. "The Production of Human Capital and the Life Cycle of Earnings," Journal of Political Economy, University of Chicago Press, vol. 75(4), pages 352-352.
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    Cited by:

    1. Saez-Marti, Maria & Sjögren, Anna, 2008. "Deadlines and distractions," Journal of Economic Theory, Elsevier, vol. 143(1), pages 153-176, November.
    2. Giorgio Di Pietro, 2012. "The Bologna Process and widening participation in university education: new evidence from Italy," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 39(3), pages 357-374, August.

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    More about this item

    Keywords

    Timing of Education; Fluctuating Opportunity Costs;

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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