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Articles 1 - 13 of 13
Full-Text Articles in Social and Behavioral Sciences
Consumer Bankruptcy, Mortgage Default And Labor Supply, Wenli Li, Costas Meghir, Florian Oswald
Consumer Bankruptcy, Mortgage Default And Labor Supply, Wenli Li, Costas Meghir, Florian Oswald
Cowles Foundation Discussion Papers
We specify and estimate a lifecycle model of consumption, housing demand and labor supply in an environment where individuals may file for bankruptcy or default on their mortgage. Uncertainty in the model is driven by house price shocks, education specific productivity shocks, and catastrophic consumption events, while bankruptcy is governed by the basic institutional framework in the US as implied by Chapter 7 and Chapter 13. The model is estimated using micro data on credit reports and mortgages combined with data from the American Community Survey. We use the model to understand the relative importance of the two chapters (7 …
Dynamic Equality Of Opportunity, John E. Roemer, Burak Unveren
Dynamic Equality Of Opportunity, John E. Roemer, Burak Unveren
Cowles Foundation Discussion Papers
What are the long-term effects of policies intended to equalize opportunities among different social classes of children? To find out, we study the stationary states of an intergenerational model where adults are either White or Blue collar employees. Both adults and the state invest in their children’s education. Our analysis indicates that the major obstacle to equalizing opportunities in the long-run is private educational investment. Next we examine economies where only the state invests in education, motivated by the Nordic experience. In a majority of these economies, no child lags behind regarding future prospects, a theoretical result confirmed by simulations.
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 …
Grading Exams: 100, 99, 98,...Or A, B, C?, Pradeep Dubey, John Geanakoplos
Grading Exams: 100, 99, 98,...Or A, B, C?, Pradeep Dubey, John Geanakoplos
Cowles Foundation Discussion Papers
No abstract provided.
A Dynamic Analysis Of Human Welfare In A Warming Planet, Humberto Llavador, John E. Roemer, Joaquim Silvestre
A Dynamic Analysis Of Human Welfare In A Warming Planet, Humberto Llavador, John E. Roemer, Joaquim Silvestre
Cowles Foundation Discussion Papers
Anthropogenic greenhouse gas (GHG) emissions have caused atmospheric concentrations with no precedents in the last half a million years, inducing serious uncertainties about future climates and their effects on human welfare. Recent climate science supports the view that the climate stabilization will require very low GHG emissions in the future. We ask: Is a path of low emissions compatible with sustainable levels of human welfare? With steady growth in human quality of life? Addressing these questions requires both defining welfare criteria and empirically estimating the possible paths of the economy. We specify and calibrate a dynamic model with four intertemporal …
A Dynamic Analysis Of Human Welfare In A Warming Planet, Humberto Llavador, John E. Roemer, Joaquim Silvestre
A Dynamic Analysis Of Human Welfare In A Warming Planet, Humberto Llavador, John E. Roemer, Joaquim Silvestre
Cowles Foundation Discussion Papers
Climate science indicates that climate stabilization requires low GHG emissions. Is this consistent with nondecreasing human welfare? Our welfare index, called quality of life (QuoL), emphasizes education, knowledge, and the environment. We construct and calibrate a multigenerational model with intertemporal links provided by education, physical capital, knowledge and the environment. We reject discounted utilitarianism and adopt, first, the Intergenerational Maximin criterion, and, second, Human Development Optimization, that maximizes the QuoL of the first generation subject to a given future rate of growth. We apply these criteria to our calibrated model via a novel algorithm inspired by the turnpike property. The …
Grading In Games Of Status: Marking Exams And Setting Wages, Pradeep Dubey, John Geanakoplos
Grading In Games Of Status: Marking Exams And Setting Wages, Pradeep Dubey, John Geanakoplos
Cowles Foundation Discussion Papers
We introduce grading into games of status. Each player chooses effort, producing a stochastic output or score. Utilities depend on the ranking of all the scores. By clustering scores into grades, the ranking is coarsened, and the incentives to work are changed. We first apply games of status to grading exams. Our main conclusion is that if students care primarily about their status (relative rank) in class, they are often best motivated to work not by revealing their exact numerical exam scores (100,99,…,1), but instead by clumping them into coarse categories ( A,B,C ). When student abilities are disparate, the …
Grading In Games Of Status: Marking Exams And Setting Wages, Pradeep Dubey, John Geanakoplos
Grading In Games Of Status: Marking Exams And Setting Wages, Pradeep Dubey, John Geanakoplos
Cowles Foundation Discussion Papers
We introduce grading into games of status. Each player chooses effort, producing a stochastic output or score. Utilities depend on the ranking of all the scores. By clustering scores into grades, the ranking is coarsened, and the incentives to work are changed. We first apply games of status to grading exams. Our main conclusion is that if students care primarily about their status (relative rank) in class, they are often best motivated to work not by revealing their exact numerical exam scores (100,99,…,1), but instead by clumping them into coarse categories ( A,B,C ). When student abilities are disparate, the …
Grading Exams: 100, 99, ..., 1 Or A, B, C? Incentives In Games Of Status, Pradeep Dubey, John Geanakoplos
Grading Exams: 100, 99, ..., 1 Or A, B, C? Incentives In Games Of Status, Pradeep Dubey, John Geanakoplos
Cowles Foundation Discussion Papers
We show that if students care primarily about their status (relative rank) in class, they are best motivated to work not by revealing their exact numerical exam scores (100,99,…,1), but instead by clumping them in broad categories (A,B,C). If their abilities are disparate, the optimal grading scheme awards fewer A’s than there are alpha-quality students, creating small elites. If their abilities are common knowledge, then it is better to grade them on an absolute scale (100 to 90 is an A, etc.) rather than on a curve (top 15% is an A, etc.). We develop criteria for optimal grading schemes …
Does Democracy Engender Equality?, John E. Roemer
Does Democracy Engender Equality?, John E. Roemer
Cowles Foundation Discussion Papers
Many suppose that democracy is an ethos which includes, inter alia, a degree of economic equality among citizens. In contrast, we conceive of democracy as ruthless political competition between groups of citizens, organized into parties. We inquire whether such competition, which we assume to be concerned with distributive matters, will engender economic equality in the long run. The society consists of an infinite sequence of generations, each comprised of adults and their children. Adults care about household consumption, and the future wages of their children, which are determined by educational policy. A given generation is characterized by the distribution of …
Risk Analysis In Economics: An Application To University Finances, William D. Nordhaus
Risk Analysis In Economics: An Application To University Finances, William D. Nordhaus
Cowles Foundation Discussion Papers
Although the theory of decision making under uncertainty has been extensively studied for a half century, applications to business applications are relatively rare. This study frames a systematic risk analysis and applies the technique to the finances of private colleges and universities. It begins by constructing budgets for colleges and universities and then analyzes the major economic factors affecting those budgets. It estimates the variability (or unpredictability) associated with each major external variable from historical data and from economic forecasts. The study finds that government-spending risks outweigh all other external stock market, interest rates, inflation, and wage trends. The paper …