We show how the ability to accumulate human capital through formal education
and through a learning-by-doing process that occurs on the job affects the
dynamic behavior of the human capital stock under a liquidity-constrained and a
non-constrained case. When there are alternatives to formal schooling in the
accumulation of human capital, investing resources in increasing school
enrollment rates in low-income countries may not be the most efficient means of
increasing the human capital stock. In addition, removal of liquidity
constraints may not be sufficient to escape a development trap.
Home | IFDPs | List of 1996 IFDPs
To comment on this site, please fill out our feedback form.
Last update: July 19, 2001