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Work by Bailey and Dynarski on growing income gap in graduation rates cited in NYT

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Martha Bailey and Nicolas Duquette win Cole Prize for article on War on Poverty

Michigan's graduate sociology program tied for 4th with Stanford in USN&WR rankings

Jeff Morenoff makes Reuters' Highly Cited Researchers list for 2014

Susan Murphy named Distinguished University Professor

Next Brown Bag

Monday, Sep 22
Paula Fomby (Michigan), Family Complexity, Siblings, and Children's Aggressive Behavior at School Entry

psc brown bag iconCognitive Economics and Human Capital

Bob Willis (Population Studies Center, Survey Research Center)

10/20/2008, at noon in room 6050 ISR-Thompson.

Traditional economic models assume that individuals have full information and act perfectly rationally. However, we show that there is considerable variation in financial literacy in the population and propose modeling the acquisition of financial knowledge in a human capital
production framework. The model makes several predictions, notably with respect to portfolio choice. For example, it helps explain household non-participation in the stock market for some fraction of the population, and it provides guidance about the share of risky assets to hold for other types of households. Estimation of the human capital production function for financial knowledge on data from the Cognitive Economics Survey yields results that are consistent with important features of the model.


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