Question

The human capital model implies that: a. education raises both productivity and earnings b. education has...

The human capital model implies that:

a.

education raises both productivity and earnings
b.

education has no impact on either productivity or earnings
c.

education raises productivity but does not raise earnings
d.

education raises earnings but does not raise productivity
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Answer #1

It can be mentioned that according to human capital theory education is actually a positive externality that enhances the productivity of individual and more the productivity of the individual more would be the earnings of the individual and for instance we understand by this theory why graduates earn more than high school people and that is the reason why it can be mentioned that

(a) is the answer to this question

Because education has a direct impact both on productivity and earnings

(b,c,d) are wrong

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