Education: Consumption or Production
NBER Working Paper No. 104
It can be claimed that education is simply a normal consumption good and that like all other normal goods, an increase in wealth will produce an increase in the amount of schooling purchased. Increased incomes are associated with higher schooling attainment as the simple result of an income effect. If this is so, schooling increases an individual's wealth only by the consumption value of the good, since it is a non-saleable asset. This paper will attempt to determine empirically the amount by which an increase in wealth is caused by schooling as distinguished from the amount by which the demand for schooling increases as the result of an increase in wealth.
Published: Lazear, Edward. "Education: Consumption or Production." Journal of Political Economy, (June 1977). Journal of Political Economy. vol.85, no. 3, pp.569-597, June 1977