Scandinavian Working Papers in Economics

Working Papers,
University of Aarhus, Aarhus School of Business, Department of Economics

No 02-10: The Educational Asset Market: A Finance Perspective on Human Capital Investment

Charlotte Christiansen () and Helena Skyt Nielsen
Additional contact information
Charlotte Christiansen: Department of Finance, The Aarhus School of Business, Postal: The Aarhus School of Business, Prismet, Silkeborgvej 2, DK 8000 Aarhus C, Denmark
Helena Skyt Nielsen: Department of Economics, Aarhus School of Business, Postal: The Aarhus School of Business, Prismet, Silkeborgvej 2, DK 8000 Aarhus C, Denmark

Abstract: Like the stock market, the human capital market consists of a wide range of assets, i.e. educations. Each young individual chooses the educational asset that matches his preferred combination of risk and return in terms of future income. A unique register-based data set with exact information on type and level of education enables us to focus on the shared features between human capital and stock investments. An innovative finance-labor approach is applied to study the educational asset market. A risk-return trade-off is revealed which is not directly related to the length of education.

Keywords: Efficient Frontier; Human Capital Investment; Mean-Variance; Performance Measures.

JEL-codes: G12; I21; J31

38 pages, July 29, 2002

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02-10_hsn.pdf PDF-file 

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