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How Income Contingent Loans could affect Return to Higher Education: a microsimulation of the French Case

Author

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  • Pierre Courtioux

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

The 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.

Suggested Citation

  • Pierre Courtioux, 2008. "How Income Contingent Loans could affect Return to Higher Education: a microsimulation of the French Case," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00369986, HAL.
  • Handle: RePEc:hal:cesptp:hal-00369986
    Note: View the original document on HAL open archive server: https://hal.science/hal-00369986
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    Cited by:

    1. Courtioux, Pierre & Gregoir, Stéphane & Houeto, Dede, 2014. "Modelling the distribution of returns on higher education: A microsimulation approach," Economic Modelling, Elsevier, vol. 38(C), pages 328-340.
    2. Pierre Courtioux & Stéphane Gregoir & Dede Houeto, 2009. "The Simulation of the Educational Output over the Life Course: The GAMEO Model," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00391393, HAL.

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    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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