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Private Investments in Higher Education: Comparing Alternative Funding Schemes

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  • Zilcha, Ithak
  • Eckwert, Bernhard

Abstract

We consider an OLG economy with endogenous human capital formation. Young individuals make decision about their investment in higher education only after they obtain some signal, correlated to their ability. We examine three different funding regimes, each requires governmental intervention but not funding, available to students if they choose to invest in higher education. The economic implications of such funding schemes in equilibrium are studies, in particular the effects on accumulation of human capital and income inequality.

Suggested Citation

  • Zilcha, Ithak & Eckwert, Bernhard, 2006. "Private Investments in Higher Education: Comparing Alternative Funding Schemes," Foerder Institute for Economic Research Working Papers 275701, Tel-Aviv University > Foerder Institute for Economic Research.
    • Handle: RePEc:ags:isfiwp:275701
    DOI: 10.22004/ag.econ.275701
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    Cited by:

    1. Kemptner, Daniel & Tolan, Songül, 2018. "The role of time preferences in educational decision making," Economics of Education Review, Elsevier, vol. 67(C), pages 25-39.
    2. Arbel, Yuval & Bar-El, Ronen & Tobol, Yossef, 2017. "Equal Opportunity through Higher Education: Theory and Evidence on Privilege and Ability," IZA Discussion Papers 10564, Institute of Labor Economics (IZA).
    3. Lance Lochner & Alexander Monge-Naranjo, 2014. "Student Loans and Repayment: Theory, Evidence and Policy," Working Papers 2014-40, Federal Reserve Bank of St. Louis.
    4. Mishra, Neelesh Kumar & Chakraborty, Abhishek & Singh, Sanjeet & Ranjan, Prabhat, 2023. "Efficiency analysis of engineering colleges in India: Decomposition into parallel sub-processes systems," Socio-Economic Planning Sciences, Elsevier, vol. 89(C).
    5. Ben Heijdra & Fabian Kindermann & Laurie Reijnders, 2017. "Life in shakles? The quantitative implications of reforming the educational financing system," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 25, pages 37-57, April.
    6. Viaene, Jean-Marie & Zilcha, Itzhak, 2013. "Public funding of higher education," Journal of Public Economics, Elsevier, vol. 108(C), pages 78-89.
    7. Hatsor, Limor, 2015. "Higher education funding: The value of information," Economics Letters, Elsevier, vol. 137(C), pages 230-233.
    8. Balmaceda, Felipe, 2021. "A failure of the market for college education and on-the-job human capital," Economics of Education Review, Elsevier, vol. 84(C).
    9. Aldieri, Luigi & Kotsemir, Maxim & Vinci, Concetto Paolo, 2018. "The impact of research collaboration on academic performance: An empirical analysis for some European countries," Socio-Economic Planning Sciences, Elsevier, vol. 62(C), pages 13-30.
    10. Bernhard Eckwert & Itzhak Zilcha, 2017. "Student loans: When is risk sharing desirable?," International Journal of Economic Theory, The International Society for Economic Theory, vol. 13(2), pages 217-231, June.
    11. Bernhard Eckwert & Itzhak Zilcha, 2014. "Higher Education: Subsidizing Tuition versus Subsidizing Student Loans," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 16(6), pages 835-853, December.

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    More about this item

    Keywords

    Financial Economics; Labor and Human Capital;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid

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