9 . Individual Problems 5-3

Perhaps the most important kind of capital is human capital. For example, most medical doctors spend years learning to practice medicine. Doctors are willing to make large investments in their human capital because they expect to be compensated for doing so when they begin work. In Canada, the government nationalized the health care system and reduced doctors' compensation. Assume doctors cannot easily move to other countries.

True or False: The investment in human capital for Canadian doctors is subject to post-investment hold-up.