Labour market economic—question solving Essay Example

High University Enrolment rate during recession

Recession is where a countries economy goes down significantly for a period of at least six

months. Employment being one of the key indicators of economy is greatly affected during this

crisis. This adversely affects the employees who either face under payment or lose their job as

well. When job opportunities decrease during recession, the university enrolment increases

(Caroline Hoxby 2015).

Mr. Garry Becker a classical economist and a celebrated Nobel –Laureate in 1992, developed a

mode to justify and explain the tendency above. He explained that, education is necessary in

adding productivity for labour markets while focusing on the future income. Workers who have

invested on human capital are more likely to get better jobs and are in a position to get job

promotions with better wages than low educated counterparts. During economic melt downs, the

effects are felt by sectors such as education , this leads to low fees , which encourages education

investors to consider joining the higher learning institutions to improve on human capital.

Probability of unemployment is likely to happen to the less skilled who now face the value of

investing.

The model however conclude that investing in many years of schooling and getting net earnings

of wages over a long period of time does not bring any income gains. An investor should invest

in learning and also start working someday in order to yield enough return on future income.

Reference

Jeffrey Brown & Caroline Hoxby 2014 (eBook), How the financial crisis and great recession affected higher education, University of Chicago press, Chicago.

Garry Becker, 1974, Human Capital Revisited, Lectures on Human Capital, University of Chicago, Chicago.