Trends in skill bias and greater turbulence in modern labor markets put wages and
employment prospects of unskilled workers under pressure. Weak incentives to utilize and
maintain skills over the life-cycle become manifest with the ageing of the population. Policies
to promote human capital formation reduce welfare state dependency among the unskilled
and offset inefficiencies in human capital formation. Skill formation features strong dynamic
complementarities over the life-cycle. Investments in the human capital of children have …