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Title: Education: Consumption or Production?
Resulting in 1 citation.
1. Lazear, Edward
Education: Consumption or Production?
Journal of Political Economy 85,3 (June 1977): 569-598.
Cohort(s): Young Men
Publisher: University of Chicago Press
Keyword(s): Educational Attainment; Income Dynamics/Shocks; Simultaneity

This paper attempts to determine whether the relationship between education and income results because schooling allows individuals to earn higher income or because higher income individuals purchase more of all normal goods, including schooling. Education is treated as a joint product, producing potential wage gains and utility simultaneously. The framework permits estimation of the rental price of a unit of education, net of consumption effects. The major finding is that education does causally produce income. By moving from 0 years of schooling to 12 years, the mean individual approximately triples his wealth. More surprising is that education is a "bad." Individuals stop short of acquiring the wealth-maximizing level of education because of the disutility associated with school attendance.
Bibliography Citation
Lazear, Edward. "Education: Consumption or Production?" Journal of Political Economy 85,3 (June 1977): 569-598.