Plot an age/earnings profile for a "typical" college graduate. How does human capital ...

The student should draw a graph for a college graduate such as shown in Figures 9.3 or 9.4.  The question is asking the student to account for the positive slope and the concavity typically observed in age/earnings profiles.  According to human capital theory, earnings increase with age because workers continue to invest in their skills long after college graduation.   Such investments may take the form of learning by doing on the job, formal training programs, and informal types of training with co-workers.  As returns from such investments are realized, the worker's earnings increase.  The rate of such investment slows because the time horizon to recoup the returns from additional investments becomes progressively shorter with age.  As the rate of investing slows with age, the increments to earnings from investment in human capital become progressively smaller, imparting a concave shape to the age/earnings profile.