Student Loans and the Allocation of Graduate Jobs
In an economy where graduate jobs are allocated by tournament, and some of the potential participants cannot borrow against their expected future earnings, the government can increase efficiency and ex ante equity by redistributing wealth or, if that is not possible, by borrowing wholesale and lending to potential participants. Both policies replace some of the less able rich with some of the more able poor and bring education investments closer to their first-best levels.
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- Alessandro Cigno & Annalisa Luporini, 2003.
"Scholarships or Student Loans? Subsidizing Higher Education in the Presence of Moral Hazard,"
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"Competing Pre-marital Investments,"
peters-00-01, University of Toronto, Department of Economics.
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"Higher education outcomes, graduate employment and university performance indicators,"
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- Karla Hoff & Andrew B. Lyon, 1994. "Non-Leaky Buckets: Optimal Redistributive Taxation and Agency Costs," NBER Working Papers 4652, National Bureau of Economic Research, Inc.
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- Robert J. Gary-Bobo & Alain Trannoy, 2008. "Efficient Tuition Fees and Examinations," Journal of the European Economic Association, MIT Press, vol. 6(6), pages 1211-1243, December.
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