Borrowing Constraints, College Aid, and Intergenerational Mobility

Eric Hanushek, Charles Leung and Kuzey Yilmaz

MPRA Paper from University Library of Munich, Germany

Abstract: This paper provides a consistent comparison of general tuition subsidies, need-based student aid, merit-based student aid, and income continent loans (ICL). Each of these policies is analyzed through a dynamic general equilibrium model in which individuals differ in family wealth and opportunities of completing college. The overlapping generation structure of the model permits evaluation of different aid schemes in their implications on the aggregate outcomes, income distribution and intergenerational mobility. Compared to current U.S. tuition and loan policies, the ICL and need-based policies are most effective in promoting the aggregate efficiency and income equality, while merit-based policies are least effective.

Keywords: need-based student aid; merit-based student aid; income contingent loan; efficiency-equality tradeoff; intergenerational mobility (search for similar items in EconPapers)
JEL-codes: D10 H20 I20 (search for similar items in EconPapers)
Date: 2014-03
New Economics Papers: this item is included in nep-dge, nep-edu and nep-ltv
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Citations: View citations in EconPapers (24)

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https://mpra.ub.uni-muenchen.de/54238/1/MPRA_paper_54238.pdf original version (application/pdf)

Related works:
Journal Article: Borrowing Constraints, College Aid, and Intergenerational Mobility (2014)
Working Paper: Borrowing Constraints, College Aid, and Intergenerational Mobility (2014)
Working Paper: Borrowing Constraints, College Aid, and Intergenerational Mobility (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:54238

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