Bolodurina I.   Golovatskaia E.   Khanzhina N.  

Optimal control of human capital allocation for piecewise smooth dynamic model

Reporter: Bolodurina I.

The article presents optimal control of human capital allocation under the condition of smoothness abnormality in the right-hand member of the dynamic system. It describes an individual’s behavior who strives to leave to his/her heirs the maximum of cash and tries to get the maximum utility through controlling expenditures and time consumption for work and studies. The objective function of the model maximizes the human life utility. The  latter is formed by the human capital development and financial savings  for heirs.
The authors developed special methods how to find optimal control and take into account smoothness abnormality in the right-hand member of the dynamic system. They defined the optimality conditions and designed algorithmic support and software to find optimal control and interpret its content.

1. Pohmer, K. Microeconomic theory of individual and group incomes. – Studies in Contemporary Economics, Vol.16. – Berlin; Heidelberg; New York; Tokyo: Springer-Verlag, 1985. – 214 p.

2. Maximova, V.F. The investment into of human capital/ manual/ V.F. Maximova. - M.: Eurasian Open University, 2010. - 54 p.

3. Andreeva, E.A. Mathematical modelling: manual / E.A. Andreeva, V.M. Tziruleva. - Tver: Tver State University, 2004. - 502 p.