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Suppose you win a scratch-off ticket that pays you $2,000 a month for the rest of...

Suppose you win a scratch-off ticket that pays you $2,000 a month for the rest of your life. According to the human capital model, will this change the net present value of an investment in human capital? Explain why or why not.

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As per the human capital theory the higher education will be considered as an investment decision. It will provide a higher rate of return on investment when there is a positive difference between marginal benefit and marginal cost. It gives a guarantee of a higher quality of life. The net present value of the investment in human capital is computed as the present value of the benefits or gains minus the present value of the costs. Since currently there will be higher costs and fewer gains thus NPV will be negative

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