... order to make the decision. Is investment on education and training rational? We have suggested education and training associated with lower unemployment and higher earning, what factors motivate some workers to remain at school or university while other workers drop out before they finish high school? Basically, people will calculate the rate of return that requires the present value of future benefits with the present value of costs. This is the private POR. If the POR greater than the interest rate, then the individual should invest in education. We assume that workers acquire the skill level that maximizes the present value of lifetime earnings. We assume that Education and other forms of training are valued only because they increase earnings. Let us consider the situation of an 18 year-old male who has just finished high School and who is contemplating whether to enter the labour market or to attend university and ...

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