Economics of Education and Human Capital


The main objective of the course is to introduce graduate students to the voluminous micro-based literature on education and human capital accumulation. Although many articles will be covered during the class, the course is not meant to be superficial. The focus in on structural approaches and therefore on modeling. For this reason, some technical tools (econometrics, statistics and dynamic programming) necessary to grasp the literature, may have to be covered in class.

At the end of the course, the student is expected to have a broad knowlege of the key topic in the literature and will be expected to be able to link the theoretical and empirical content pursued in class, to a wide range of public policy issues debated nowadays.


The following topics will be covered. 

1. Human Capital: Defitions and Foundations- Becker-Ben Porath and Mincer

2. General vs. Specic Human Capital 

3. Measuring Returns to Schooling and the Ability Bias 

4. Comparative Advantages and the Roy Model

5. Estimating Distribution of Returns with Factor Models 

6. Structural Dynamic Models of Schooling 

7. Education Financing and Student Loans

8. Empirical Literature on Liquidity Constraints

9. Investing in Children: Cognitive and Non-Cognitive Skills in Education 

10. Class-size and Student Performance 

11. Sorting between Public and Private Schools 

12. Fields of Study and Occupation 

13. Human Capital: Inequality, Risk and Macroeconomics 



James J. Heckman Lance J. Lochner Petra E. Todd, Earnings Functions, Rates of Return and Treatment E⁄ects: The Mincer Equation and Beyond, August 2005, IZA DP 1700 

Acemoglu, Daron and Pischke, JS (1998a). Why do rms train? Theory and evidence,QuarterlyJournal of Economics, vol. 113, pp. 79-119. 
Acemoglu, Daron and Pischke,JS(1998b). The structure of wages and investment in general training,Journal of Political Economy, 1999

Belzil, Christian (2007) The Return to Schooling in Structural Dynamic Models: A SurveyThe European Economic Review, 51(5), 1059-1105. 
Card D (1999) The Causal Effect of Education on Earnings Handbook of Labor Economics, Volume 3, Edited by O. Ashenfelter and D. Card

James J. Heckman Lance J. Lochner Petra E. Todd, Earnings Functions, Rates of Return and Treatment E⁄ects: The Mincer Equation and Beyond, August 2005, IZA DP 1700 
Willis, R. J. and S. Rosen (1979, October). Education and selfselection. Journal of Political Economy 87(5, Part 2), S7S36 

Carneiro, P., K. Hansen, and J. J. Heckman (2003, May). Estimating distributions of treatment effects with an application to the returns to schooling and measurement of the e⁄ects of uncertainty on college choice. International Economic Review 44(2), 361422. 2001 Lawrence R. Klein Lecture

Cameron, Stephen and Heckman, James (1998) Life Cycle Schooling and Dynamic Selection Bias: Models and Evidence for Five Cohorts of American MalesJournal of Political Economy, 106 (2), 262-333.

Keane, M and Ken Wolpin (1997) The Career Decisions of Young Men, Journal of Political Economy, vol 105, no 3, 473-522 
Eckstein, Zvi and Kenneth Wolpin (1999) Why Youths drop out of High School: The Impact of Preferences, Opportunities and Abilities, Econometrica 67 (6,)

Lochner L. and Monge-Naranajo (2011) The Nature of credit constraints and human capital American Economic Review 101 (6): 2487-2529 
Keane, M. P. (2002). "Financial Aid, Borrowing Constraints, and College Attendance: Evidence from Structural Estimates ." American Economic Review, 92(2): 293-29

Belley, P. and L. Lochner (2007). The changing role of family income and ability in determining educational achievement. Journal of Human Capital 1(1), 3789. 
Cameron, Stephen and Christopher Taber (2004) Estimation of Educational Borrowing Constraints Using Returns to SchoolingJournal of Political Economy, 112 (1), 132-182

Carneiro, P. and J. J. Heckman (2002, October). The evidence on credit constraints in post secondary schooling. Economic Journal 112(482), 705734

Keane and Wolpin, 2001, IER, The E⁄ects of Parental Transfers and Borrowing Constraints on Educational Attainment 
Stinebrickner and Stinebrickner, AER 2008, The E⁄ect of Credit Constraints on the college Drop-out decision: A Direct Approach

Belzil, C, A Maurel and M. Sidibe (2017), Estimating the Value of Higher Education financial aid: Evidence from a Field Experiment, Working Paper Cornell University and NBER w23641

Todd, Petra and KennethWolpin, TheProductionofCognitiveAchievements in Children Journal of Human Capital, 2008. 
Cunha, Heckman, Schennach 2011, Estimating the Technology of Cognitive and Non-cogntive Skill Formation, Econometrica, Vol. 78, No. 3 (May, 2010), 883931

Cunha, Heckman, 2007, The Technology of Skill Formation, American Economic Review 
Heckman, J. and S. Mosso The Economics of Human Development and Social Mobility, IZA Working Paper 8000


Leuven, Edwin and Sturla A. L?kken "Long Term Impacts of Class Size in Compulsory School" IZA DP No. 10594 
Fredriksson,P.,ckert,B.,andOosterbeek,H.(2013). Long-terme⁄ects of class size. Quarterly Journal of Economics,128(1):249285. 

Hoxby, C. M. (2000). The e⁄ects of class size on student achievement: New evidence from population variation. The Quarterly Journal of Economics,115(4):12391285


Epple, D. and Romano, R. (1998). Competition Between Private and Public Schools, Vouchers and Peer Group E⁄ects. American Economic Review, 88, 33-63.

Nechyba, T Income and Peer Quality Sorting in Public and Private Schools, Handbook of the Economics of Education, 2006 

Hoxby, C " Does Competition among Public Schools Benet Students and Tax Payers?American Economic Review, 2000, 

Epple, Romano and Sieg (2006) Admission, Tuition and Financial Aid Policies in the Market for Higher EducationEconometrica 


Altonji J, Arcidiacono P. and A. Maurel (2015) The Analysis of Field choice in College and Graduate School: Determinants and Wage Effects, NBER Working Paper 21655 
Arcidiacono, P., Hotz, V. J. & Kang, S. (2012), Modeling college major choices using elicited measures of expectations and counterfactuals, Journal of Econometrics 166, 316. 
Gemici A. and Matthew Wiswall (2014) Evolution of Gender Differences in Post-Secondary Human Capital Investments: College Majors, International Economic Review, 55(1), 

Arcidiacono, P., Hotz, V., Maurel, A. & Romano, T. (2014), Recovering ex ante returns and preferences for occupations using subjective expectations data, NBER Working Paper 20626.

Wiswall, M. and B. Zafar (2015) Determinants of College Major Choice: Identication using an Information Experiment, Review of Economic Studies 82 (2): 791-824

Levhari and Weiss, The E⁄ect of Risk on the Investment in Human Capital, American Economic Review, 1974 

Bowlus, Audra J., and Chris Robinson. 2012, Human Capital Prices, Productivity, andGrowth."American Economic Review, 102(7): 34833515.

Murphy, K.M. and R. Topel (2016) Human Capital Investment, InequalityandEconomicGrowth, NBER Working Paper 21841 (Journal of Labor Economics, 2017) 

The Evolution of Education: A Macroeconomic Analysis, Diego Restuccia and Guillaume Vandenbrouck, International Economic Review 2013 

Huggett, Mark, Gustavo Ventura, and Amir Yaron. 2011. "Sources of Lifetime Inequality." American Economic Review, 101(7): 292354. 
Castro, Rui and Daniele Coen-Pirani Explaining the Evolution of Educational Attainment in the United Statesy, American Economic Journal: Macroeconomics 2016, 8(3): 77112