Suppose people with 15 years of schooling average earnings of $60,000 while people with 16 years of education average $66,000.

Suppose the skills acquired in school depreciate over time, perhaps because technological change makes the things learned in school obsolete. What happens to a worker’s optimal amount of schooling if the rate of depreciation increases?

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If the rate of depreciation of skills acquired in school increases it would mean that ... View the full answer