Risky Human Capital and Alternative Bankruptcy Regimes for Student Loans
AbstractIn a heterogeneous life cycle economy with human capital accumulation, the option to discharge student loans under a liquidation regime helps alleviate some of the risk of investing in human capital. However, exclusion from borrowing is especially costly for high school graduates with low ability and human capital, for whom the gains from this insurance option are large. Replacing liquidation with reorganization induces significant allocational consequences across education groups. Overall, reorganization improves welfare relative to liquidation. Poor high school graduates with low ability and human capital benefit the most. However, an economy with partial dischargeability is desirable on welfare grounds.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by University of Chicago Press in its journal Journal of Human Capital.
Volume (Year): 5 (2011)
Issue (Month): 2 ()
Pages: 153 - 206
Contact details of provider:
Web page: http://www.journals.uchicago.edu/JHC/
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Lance Lochner & Alexander Monge-Naranjo, 2012.
"Credit Constraints in Education,"
Annual Review of Economics,
Annual Reviews, vol. 4(1), pages 225-256, 07.
- Lance Lochner & Alexander Monge-Naranjo, 2012. "Credit Constraints in Education," University of Western Ontario, CIBC Centre for Human Capital and Productivity Working Papers 20121, University of Western Ontario, CIBC Centre for Human Capital and Productivity.
- Lance Lochner & Alexander Monge-Naranjo, 2011. "Credit Constraints in Education," Working Papers 2011-036, Human Capital and Economic Opportunity Working Group.
- Lance Lochner & Alexander Monge-Naranjo, 2011. "Credit Constraints in Education," NBER Working Papers 17435, National Bureau of Economic Research, Inc.
- Schwager, Robert, 2012. "Student loans in a tiebout model of higher education," Center for European, Governance and Economic Development Research Discussion Papers 137, University of Goettingen, Department of Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Journals Division).
If references are entirely missing, you can add them using this form.