Investment Opportunities and Economic Outcomes: Who Benefits From College and the Stock Market?
Ivan Vidangos and
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Kartik Athreya: Federal Reserve Bank of Richmond
Felicia Ionescu: Federal Reserve Board
Ivan Vidangos: Federal Reserve Board
No 1151, 2018 Meeting Papers from Society for Economic Dynamics
Does the power of college to increase well-being exceed that of stocks, as subsidies to the former suggest? Perhaps not: we show that access to college increases well-being, but only for those whose preparedness and ability poise them for success. For some others, access to college affects well-being and mobility negligibly. This suggests that investments whose returns do not depend on individual characteristics may be more effective in improving the well-being of some individuals. The stock market, which offers comparably high returns, is a natural alternative. We find that a non-trivial fraction of high-school graduates would prefer a stock-index retirement fund to the subsidy currently flowing to college.
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed018:1151
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