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Thus, Becker decided to adopt an approach that assumed the cost of an investment in human capital as the earnings foregone and the rate of capitalisation as a weighted average of the rates of return on the individual investments.
Estimating and aggregating future earnings foregone, or lost LEP, provide a sense of the potential economic benefits of preventing childhood lead exposure that persists in LMICs.
They were also asked about mode of travel and the cost of fares when visiting health care facilities, expenditure on over-the-counter preparations for cough, how much they had lost in terms of earnings foregone because of their child's illness, and any extra expenditure on child or other dependent care.
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Moreover, small firms are not required to pay all foregone earnings and contributions.
For that fraction of the population which was unemployed, a minimum wage rate of $5.155 per hour was used to value the foregone earnings potential had these persons been in paid employment [ 29].
From these benefits one should subtract the additional private costs, which include foregone earnings.
Second, by considering the age range between 18 and 67, Rouse downplays the foregone earnings of early school leavers, who may start working well before age 18.
This approach was hindered by the fact that the specification of the investment period was not straightforward and by the existence of imperfect knowledge of foregone earnings.
This framework explained the decline of investment in human capital with age due to reduced profitability (smaller time spans and rising foregone earnings).
Becker emphasised the relevance of foregone earnings in terms of costs rather than direct costs, thus the impact of good economic conditions and the lack of information and motivation, as the main reasons limiting poorer students' investment in human capital.
Direct schooling cost and foregone earnings of the child due to continuing education appear less problematic, which allows caregivers to be more optimistic and to expect higher educational attainment.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com