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HUMAN Capital Contracts in Chile : An excercise based on Income data on Chilean HE graduates

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  • Lozano Rojas, Felipe Andres

Abstract

Given that a significant proportion of the Chilean education system is financed with household resources, we present human capital contracts (HCC) as an option for higher education financing for students facing financial constraints, but who could use their expected future income flows as collateral. We analyze the feasibility of HCC implementation in Chile over a set of college majors. We find that HCC can partially fund any college major in Chile and finance some majors completely, under certain conditions. Among the variables analyzed, those affecting most severely the contract pricing are initial wage level after graduation and graduation rate.

Suggested Citation

  • Lozano Rojas, Felipe Andres, 2011. "HUMAN Capital Contracts in Chile : An excercise based on Income data on Chilean HE graduates," MPRA Paper 42982, University Library of Munich, Germany, revised 29 Nov 2012.
    • Handle: RePEc:pra:mprapa:42982
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Higher education returns; education financing; human capital contracts; human capital earning functions; income contingent schemes;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • G13 - Financial Economics - - General Financial Markets - - - Contingent Pricing; Futures Pricing
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics

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