How Income Contingent Loans could affect Return to Higher Education: a microsimulation of the French Case
AbstractThe paper assesses the implementation of income contingent loan schemes for higher education (ICL) in an institutional context characterized by two main features: (i) a former tuition free system and (ii) a great heterogeneity in tertiary education’s diplomas quality and cost, which impacts the individual career paths. In this particular case, ICL implementation leads to a trade-off between increasing ‘career’ equity in terms of collective public spending versus individual gains and widening low education traps by reducing the economic incentives to pursue a tertiary education curriculum. Based on a dynamic microsimulation model we propose an ex ante evaluation of the enlargement of low education traps induced by the implementation of different ICL designs in France. We conclude that the risk of low education traps’ enlargement remains very small.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 14246.
Date of creation: Jul 2008
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higher education; income contingent loan; microsimulation;
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Find related papers by JEL classification:
- I2 - Health, Education, and Welfare - - Education
- C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
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