Suchergebnisse

In the education literature, it is generally acknowledged that both credit and insurance for students are rationed. In order to provide a rationale for these observations, we present a model with perfectly competitive banks and risk averse students who have private information on their ability to learn and can decide to default on debt. We show that the combination of ex-post moral hazard and adverse selection produces credit market rationing when default penalties are low. When default penalties increase, the level of student risk aversion proves crucial in determining the market outcome. If risk aversion is low, banks offer non-insuring pooling contracts at equilibrium that may result in overinvestment in education. If student risk aversion is high, high ability students are separated and student loan contracts involve a limited amount of insurance.

Abstract
Higher education is increasingly provided by both public and private universities, in particular in the developing world. Considering a mixed oligopoly setting and inspired by the Brazilian context, we explore the relative merits of some frequently used higher education policies in a context where a high-quality public university interacts with a lower-quality private university. We calibrate the model to match relevant values of Brazilian earnings and educational distribution. Subsidising private university tuition fees increases participation, but many high ability students remain excluded, especially if the subsidy is substantial. Affirmative action improves the surplus associated with the public university system, as more high ability individuals attend the public university, but virtually does not increase higher education participation. Although an expansion of public university places induces a reduction in private university fees, total university enrolment grows slowly, and many high-ability individuals cannot obtain a university education.

"Most industrial countries have traditionally subsidized the provision of higher education. Alternative financing schemes, which rely on larger contributions from students, are being increasingly adopted. Those based on income-contingent loans provide insurance against uncertain educational outcomes. We consider a unified framework where we analyze the following schemes: 1) the traditional tax-subsidy, 2) pure loans, 3) income-contingent loans with risk-sharing, and 4) income-contingent loans with risk-pooling. We focus on their insurance role and their effect on higher education participation. We show that an income-contingent loan with risk-pooling can induce the optimal level of participation provided that it covers both financial costs of education and forgone earnings." (Author's abstract, IAB-Doku) ((en))