Education and Borrowing Constraints: Tests Vs. Prices
AbstractThis paper examines the properties of exams and markets as alternative allocation devices under borrowing constraints. Exams dominate markets in terms of matching efficiency. Whether aggregate consumption is greater under exams than under markets depends on the power of the exam technology; for a sufficiently powerful test, exams dominate markets in terms of aggregate consumption as well. The positive effects of income taxation are analysed and the optimal allocation scheme when wealth is observable is derived. The latter consists of a fellowship scheme, in which markets set school prices but the government gives out fellowships, based on need and the ability to obtain a given exam score.
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 C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 1913.
Date of creation: Jul 1998
Date of revision:
Contact details of provider:
Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ.
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
Other versions of this item:
- Raquel Fernandez, 1998. "Education and Borrowing Constraints: Tests vs. Prices," NBER Working Papers 6588, National Bureau of Economic Research, Inc.
- D52 - Microeconomics - - General Equilibrium and Disequilibrium - - - Incomplete Markets
- E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
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.:
- Fernandez, Raquel & Gali, Jordi, 1999.
"To Each According to . . . ? Markets, Tournaments, and the Matching Problem with Borrowing Constraints,"
Review of Economic Studies,
Wiley Blackwell, vol. 66(4), pages 799-824, October.
- Raquel Fernandez & Jordi Gali, 1997. "To Each According To...? Markets, Tournaments, and the Matching Problem with Borrowing Constraints," NBER Working Papers 5930, National Bureau of Economic Research, Inc.
- Fernández, Raquel & Galí, Jordi, 1997. "To Each According To...? Markets, Tournaments, and the Matching Problem with Borrowing Constraints," CEPR Discussion Papers 1627, C.E.P.R. Discussion Papers.
- Acemoglu, Daron, 1996.
"Matching, Heterogeneity and the Evolution of Income Distribution,"
CEPR Discussion Papers
1345, C.E.P.R. Discussion Papers.
- Acemoglu, Daron, 1997. " Matching, Heterogeneity, and the Evolution of Income Distribution," Journal of Economic Growth, Springer, vol. 2(1), pages 61-92, March.
- Daron Acemoglu, 1995. "Matching, Heterogeneity and the Evolution of Income Distribution," Working papers 95-25, Massachusetts Institute of Technology (MIT), Department of Economics.
- Becker, Gary S & Tomes, Nigel, 1979. "An Equilibrium Theory of the Distribution of Income and Intergenerational Mobility," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1153-89, December.
- Cole, Harold L & Mailath, George J & Postlewaite, Andrew, 1992. "Social Norms, Savings Behavior, and Growth," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1092-1125, December.
- Fernandez, Raquel & Rogerson, Richard, 1996. "Income Distribution, Communities, and the Quality of Public Education," The Quarterly Journal of Economics, MIT Press, vol. 111(1), pages 135-64, February.
- Becker, Gary S, 1973. "A Theory of Marriage: Part I," Journal of Political Economy, University of Chicago Press, vol. 81(4), pages 813-46, July-Aug..
- Jimmy Chan & Erik Eyster, 2002. "Admission Impossible? Self Interest and Affirmative Action," Economics Working Paper Archive 479, The Johns Hopkins University,Department of Economics.
- Laura Romero, 2005. "On the role of borrowing constraints in public and private universities' choices," Economics Bulletin, AccessEcon, vol. 9(6), pages 1-8.
- Laura Romero & Elena del Rey, 2004. "Competition Between Public And Private Universities: Quality, Prices And Exams," Economics Working Papers we046423, Universidad Carlos III, Departamento de Economía.
- Weber, Andrea, 2006.
"Educational Effects of Alternative Secondary School Tracking Regimes in Germany,"
Darmstadt Discussion Papers in Economics
35977, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute of Economics (VWL).
- Andrea M. Mühlenweg, 2008. "Educational Effects of Alternative Secondary School Tracking Regimes in Germany," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 128(3), pages 351-379.
- Weber, Andrea M., 2006. "Educational Effects of Alternative Secondary School Tracking Regimes in Germany," Hannover Economic Papers (HEP) dp-353, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
- Murat F. Iyigun & Andrew T. Levin, 1998. "Macroeconomic implications of competitive college admissions," International Finance Discussion Papers 613, Board of Governors of the Federal Reserve System (U.S.).
- Murat F. Iyigun & Andrew T. Levin, 2003.
"What Determines Public Support for Affirmative Action?,"
Southern Economic Journal,
Southern Economic Association, vol. 69(3), pages 612-627, January.
- Murat F. Iyigun & Andrew T. Levin, 1998. "What determines public support for affirmative action?," International Finance Discussion Papers 620, Board of Governors of the Federal Reserve System (U.S.).
- del Rey, Elena & Romero, Laura, 2004. "Prices versus Exams as Strategic Instruments for Competing Universities," Working Papers of the Department of Economics, University of Girona 12, Department of Economics, University of Girona.
- Guilhem Lecouteux & Léonard Moulin, 2013. "From welfare to preferences, do decision flaws matter? The case of tuition fees," Working Papers hal-00807687, HAL.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.