More on Incorporated Persons

Alex Tabarrok has a follow-up post on the "shares of earnings" theme. The comments to this and the previous post are as interesting as his posts. The most interesting point: it's already happening.

Ryan Hahn also points to Lumni, a new firm that is investing in human capital in the developing world:

Lumni designs, markets and manages "Human capital funds", an innovative investment vehicle for financing education. Students agree to pay a fixed percentage of their individual incomes for a predetermined number of months after graduation. The arrangement traspases part of the risk of investing in education from the student to the investor, who is in a better position to diversify it.


Lumni is the brainchild of economics professor Miguel Palacios. Here is his book and Cato paper on human capital contracts.

It ought to be interesting to see how this turns out.

As a commenter points out, it doesn't make sense to invest willy-nilly - you want to put your cash on the prospects with the most earning potential. There is already a market for the eggs of women with high SAT scores. Sperm are cheaper to produce and easier to store - soon women all over the world may be bidding up prize specimens for the cash value of the offspring.

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