Article ID Journal Published Year Pages File Type
5103811 Research in Economics 2016 39 Pages PDF
Abstract
We develop a model in which students choose their college coursework based on both investment and consumption incentives. These education decisions are socially inefficient. This result is driven by the fact that students do not consider an externality in the working environment of acquiring education for investment purposes. Regulated tuition fees have more potential to induce socially optimal outcomes than regulating levels of education given information constraints. The model can help explain several empirical regularities in the education literature.
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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