The time spent by students in college
A)leads to lower future wages
B)is an investment in human capital
C)decreases human capital by lowering work experience
D)would be a positive compensating wage differential in markets for student labor
E)increases as the wage rate rises

Question

Quizplus · Accepted Answer

Investing time in college is considered an investment in human capital. This investment will potentially result in higher future wages as the individual acquires specialized skills and knowledge that can yield higher productivity and income. Therefore, option B is the correct choice. Option A is incorrect, as investing time in college typically leads to higher future wages rather than lower. Option C is incorrect as work experience is not the only component of human capital, and in many cases, education can enhance work experience. Option D is incorrect, as a compensating wage differential refers to the higher wages needed to compensate for undesirable aspects of a job, which is not applicable for student labor. Option E is incorrect, as the time spent by students in college usually remains constant regardless of wage rates in the labor market.

The Time Spent by Students in College