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Education Policy And Intergenerational Transfers In Equilibrium, Brant Abbott, Giovanni Gallipoli, Costas Meghir, Giovanni L. Violante
Education Policy And Intergenerational Transfers In Equilibrium, Brant Abbott, Giovanni Gallipoli, Costas Meghir, Giovanni L. Violante
Cowles Foundation Discussion Papers
This paper compares partial and general equilibrium effects of alternative financial aid policies intended to promote college participation. We build an overlapping generations life-cycle, heterogeneous-agent, incomplete-markets model with education, labor supply, and consumption/saving decisions. Altruistic parents make inter vivos transfers to their children. Labor supply during college, government grants and loans, as well as private loans, complement parental transfers as sources of funding for college education. We find that the current financial aid system in the U.S. improves welfare, and removing it would reduce GDP by two percentage points in the long-run. Any further relaxation of government-sponsored loan limits would …
Education Policy And Intergenerational Transfers In Equilibrium, Brant Abbott, Giovanni Gallipoli, Costas Meghir, Giovanni L. Violante
Education Policy And Intergenerational Transfers In Equilibrium, Brant Abbott, Giovanni Gallipoli, Costas Meghir, Giovanni L. Violante
Cowles Foundation Discussion Papers
This paper examines the equilibrium effects of alternative financial aid policies intended to promote college participation. We build an overlapping generations life cycle model with education, labor supply, and consumption/saving decisions. Cognitive and non-cognitive skills of children depend on the cognitive skills and education of parents, and affect education choice and labor market outcomes. Driven by both altruism and paternalism, parents make transfers to their children which can be used to fund education, supplementing grants, loans and the labor supply of the children themselves during college. The crowding out of parental transfers by government programs is sizable and thus cannot …
Education Policy And Intergenerational Transfers In Equilibrium, Brant Abbott, Giovanni Gallipoli, Costas Meghir, Giovanni L. Violante
Education Policy And Intergenerational Transfers In Equilibrium, Brant Abbott, Giovanni Gallipoli, Costas Meghir, Giovanni L. Violante
Cowles Foundation Discussion Papers
This paper examines the equilibrium effects of alternative financial aid policies intended to promote college participation. We build an overlapping generations life-cycle, heterogeneous-agent, incomplete-markets model with education, labor supply, and consumption/saving decisions. Driven by both altruism and paternalism, parents make inter vivos transfers to their children. Both cognitive and non-cognitive skills determine the non-pecuniary cost of schooling. Labor supply during college, government grants and loans, as well as private loans, complement parental resources as means of funding college education. We find that the current financial aid system in the U.S. improves welfare, and removing it would reduce GDP by 4-5 …