Risks to Human Capital

• 成果类型: Article
• 署名作者: Ebrahimian, Mehran; Wachter, Jessica A.
• 署名单位: Stockholm School of Economics; University of Pennsylvania; U.S. Securities & Exchange Commission (SEC)
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2022.03068
• 发表日期: 2025
• 关键词: Moral hazard; limited commitment; equity premium; financial crises

摘要

We build a model with inalienable human capital, in which investors finance individuals who can potentially become skilled. Although investment in skill is always optimal, it does not take place in some states of the world, due to moral hazard. In intermediate states of the world, individuals acquire skill; however outside investors and individuals inefficiently share risk. We show that this simple moral hazard problem, combined with risk aversion of individuals and outside investors, amplifies the equity premium, lowers the risk -free rate, and leads to disaster states that fall especially heavily on some agents but not on others. We show that the possibility of disaster states distorts risk prices and affects wealth inequality, even under calibrations in which they never occur in equilibrium.