In the text, we supposed a college education raised a persons wage by $30,000 per year, from
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(a) Suppose you are a high school senior deciding whether or not to go to college. What is the present discounted value of your labor income if you forgo college and start work immediately?
(b) As an alternative, you could pay $20,000 per year in college tuition, attend for 4 years, and then earn $70,000 per year after you graduate. What is the present discounted value of your labor earnings under this plan? (Compute this value from the point of view of a high school senior.)
(c) Discuss the economic value of a college education.
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Well assume that school time is four years and that work time is still 45 years beginnin...View the full answer
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