Imagine that the wage-schooling locus is given by w(s)=s^(1/3). What will be the optimal level of education for an individual to take if next period’s earnings in any given time are worth 95% of current earnings for that individual?

Principles of Economics, 7th Edition (MindTap Course List)
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Author:N. Gregory Mankiw
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Chapter19: Earnings And Discrimination
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Imagine that the wage-schooling locus is given by w(s)=s^(1/3). What will be the optimal level of education for an individual to take if next period’s earnings in any given time are worth 95% of current earnings for that individual?

---- HINT: the answer is s=20/57.

 

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