Scholarships or Student Loans? Subsidizing Higher Education in the Presence of Moral Hazard
AbstractStudent loans, even income-contingent ones, are not optimal. Potential university students with the appropriate characteristics should be offered a scholarship, dependent on both need and merit. The award of the scholarship should be conditional on the choice of university degree, but students with a natural aptitude for studies that do not hold the prospect of a well paid job should not be pushed towards potentially more lucrative ones. The scheme should be financed by a graduate tax that re-distributes from the better paid to the academically more successful.
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 InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 973.
Date of creation: 2003
Date of revision:
scholarships; student loans; graduate tax; principal-agent; moral hazard;
Other versions of this item:
- Alessandro Cigno & Annalisa Luporini, 2009. "Scholarships or Student Loans? Subsidizing Higher Education in the Presence of Moral Hazard," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 11(1), pages 55-87, 02.
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- I28 - Health, Education, and Welfare - - Education - - - Government Policy
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Sinclair-Desgagne, Bernard, 1994. "The First-Order Approach to Multi-signal Principal-Agent Problems," Econometrica, Econometric Society, vol. 62(2), pages 459-66, March.
- Barbaro, Salvatore, 2002. "The distributional impact of subsidies to higher education: empirical evidence from Germany," FiBS-Forum 11, Forschungsinstitut für Bildungs- und Sozialökonomie (FiBS).
- Milgrom, Paul R & Weber, Robert J, 1982.
"A Theory of Auctions and Competitive Bidding,"
Econometric Society, vol. 50(5), pages 1089-1122, September.
- Alessandro Cigno & Annalisa Luporini & Anna Pettini, 2000.
"Transfers to Families with Children as a Principal-Agent Problem,"
CESifo Working Paper Series
351, CESifo Group Munich.
- Cigno, Alessandro & Luporini, Annalisa & Pettini, Anna, 2003. "Transfers to families with children as a principal-agent problem," Journal of Public Economics, Elsevier, vol. 87(5-6), pages 1165-1177, May.
- Alessandro Cigno & Annalisa Luporini & Anna Pettini, 2000. "Tranfers to families with children as a principal-agent problem," CHILD Working Papers wp02_00, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
- Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
- Salvatore Barbaro, 2002. "The Distributional Impact of Subsidies to Higher Education - Empirical Evidence from Germany," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 59(4), pages 458-, December.
- Salvatore Barbaro, 2002. "The Distributional Impact of Subsidies to Higher Education - Empirical Evidence from Germany," Departmental Discussion Papers 114, University of Goettingen, Department of Economics.
- Cigno, Alessandro & Luporini, Annalisa, 2009.
"Optimal Family Policy in the Presence of Moral Hazard, When the Quantity and Quality of Children Are Stochastic,"
IZA Discussion Papers
4179, Institute for the Study of Labor (IZA).
- Alessandro Cigno & Annalisa Luporini, 2011. "Optimal Family Policy in the Presence of Moral Hazard when the Quantity and Quality of Children are Stochastic," CESifo Economic Studies, CESifo, vol. 57(2), pages 349-364, June.
- Alessandro Cigno & Annalisa Luporini, 2009. "Optimal family policy in the presence of moral hazard, when the quantity and quality of children are stochastic," CHILD Working Papers wp13_09, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
- Alessandro Cigno & Annalisa Luporini, 2013.
"Student loans and the allocation of graduate jobs,"
CHILD Working Papers Series
16, Centre for Household, Income, Labour and Demographic Economics (CHILD) - CCA.
- Alessandro Cigno & Annalisa Luporini, 2013. "Student Loans and the Allocation of Graduate Jobs," Working Paper Series 38_13, The Rimini Centre for Economic Analysis.
- Alessandro Cigno & Annalisa Luporini, 2013. "Student loans and the allocation of graduate jobs," Working Papers Series wp2013_15.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze dell'Economia e Dell'Impresa.
- Maria Racionero & Elena Del Rey, 2006.
"Financing schemes for higher education,"
ANU Working Papers in Economics and Econometrics
2006-460, Australian National University, College of Business and Economics, School of Economics.
- Joan Rosselló, 2007. "Does a public university system avoid the stratification of public universities and the segregation of students?," DEA Working Papers 26, Universitat de les Illes Balears, Departament d'Economía Aplicada.
- repec:lan:wpaper:2436 is not listed on IDEAS
- repec:lan:wpaper:2516 is not listed on IDEAS
- repec:lan:wpaper:2660 is not listed on IDEAS
- repec:lan:wpaper:2434 is not listed on IDEAS
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Julio Saavedra).
If references are entirely missing, you can add them using this form.