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Suppose that the wage-schooling schedule is

w(s) = 2
k
0
p
s
and that the rate of interest rate is r.

It can be shown that the marginal return to schooling investments is MW(s) = k 0 = p s.

What condition governs the optimal choice of education, s*? If r= 5% and ifk 0 = 5.25, what is the optimal schooling level?

Econometrics, Economics

  • Category:- Econometrics
  • Reference No.:- M9473905

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