The Effect of Price and Income on Investment in Schooling

Yoram Weiss, Arden Hall and Fred Dong

Journal of Human Resources, 1980, vol. 15, issue 4, 611-640

Abstract: This paper investigates the impact of a negative income tax and a program of schooling subsidies on the demand for schooling of adult heads of families. A two-period model of labor supply is developed in which schooling is incorporated. An empirical version of the model is estimated using data from the first three years of the Seattle and Denver Income Maintenance Experiments. Strong effects of the schooling subsidies were found, but net effects of the negative income tax on schooling were not significant. The magnitude of the schooling subsidy effects implies a substantial positive social rate of return to schooling subsidies.

Date: 1980
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Persistent link: https://EconPapers.repec.org/RePEc:uwp:jhriss:v:15:y:1980:i:4:p:611-640

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