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Labour Economics
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Labour Economics
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The Risk-Return Trade-off in Human Capital Investment

Authors: Nielsen, Helena Skyt; id_orcid 0000-0003-2577-4734; Christiansen, Charlotte; id_orcid 0000-0001-7360-1147; Joensen, Juanna Schrøter;

The Risk-Return Trade-off in Human Capital Investment

Abstract

In this paper we analyze investments in human capital assets in a way which is standard for financial assets, but not (yet) for human capital assets. We study mean-variance plots of human capital assets. We compare the properties of human capital returns using a performance measure and by using tests for mean-variance spanning. A risk-return trade-off is revealed, which is not only related to the length of education but also to the type of education. We identify a range of educations that are efficient in terms of investment goods, and a range of educations that are inefficient, and may be chosen for consumption purposes.

Keywords

educational choice, mean-variance analysis, Bildungsinvestition, ddc:330, Bildungsverhalten, efficient frontier, J24, Bildungsertrag, Educational Choice; Efficient Frontier; Human Capital Investment; Mean-Variance Analysis, human capital investment, Rendite, Humankapital, Risiko, I21

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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
60
Top 10%
Top 10%
Average
bronze
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