in18 - Human Capital Investment The process of increasing...

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1 Human Capital Investment - The process of increasing the household’s holdings of human wealth either by engaging in formal or informal training or by adding household members.
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2 Examples of Human Capital Investment... getting a college education teaching your son or daughter how to cook learning carpentry skills in an apprentice program sharing your life with a partner having a child reading the newspaper
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3 Theory of Human Capital Investment People are investing in human capital by going to school. The returns (or benefits) of this human capital investment include higher earnings lower probability of unemployment The costs include foregone earnings while in school and out-of- pocket costs of education Brighter individuals get more education because they are more likely to see that the marginal benefits exceed the marginal costs.
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4 Investment in Education What are the differences in earnings by educational attainment? Holding years of education constant, why do earnings vary by occupation? gender? race?
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5 Career Choice Factors Job-an employment position obtained mainly to earn money Career-a commitment to a profession that requires continued training and offers a clear path for occupational growth.
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6 Level of formal training affects financial success Training may be viewed in two main categories Technical Skills refers to specialized career training for a specific profession. General Skills are traits adaptable to most work situations. Some can be acquired at school, while others require experience. Career Choice Factors
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7 PERSONAL FACTORS Aptitudes - What natural abilities, such as working well in team settings, do you possess? Interests inventories - Help you determine what gives you satisfaction. Your personality - How much structure do you like? Do you perform best in low-pressure or high-pressure working environments? Career Choice Factors
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8 Average wages, all workers over 25 – 2007 21,881 33,609 59,365 70,559 121,340 95,785 0 50,000 100,000 150,000 < HS HS Bachelor's Degree Masters Degree Professional Degree Doctorate Avg Salary Data: Current Population Survey (CPS) 2008 http://pubdb3.census.gov/macro/032008/perinc/new03_001.htm
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10 Developing a Career Action Plan
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  • Spring '06
  • Tapley
  • Academic degree, Bachelor's degree, Human Capital Investment, Professional Degree Masters Degree Bachelor, Educational Level Doctoral Degree Professional Degree Master

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