ABSTRACT
Introducing the risk of groundwater loss may cause the household to be more conservative in its effort to accumulate human capital. This is because education is expensive, requiring crop-derived income to cover its cost, which in turn requires consumption of groundwater resources. If the resulting decline in groundwater is too rapid, it will threaten the long-term sustainability of the groundwater reservoir, and hence the household’s future ability to grow crops and generate funds to invest in education. This unsustainable depletion of groundwater may even jeopardize the household’s occupational transition plan. To explore this idea and generate more concrete insights, we now turn to a numerical simulation of the above problem.
