TY - JOUR
T1 - Education policy and intergenerational transfers in equilibrium
AU - Abbott, Brant
AU - Gallipoli, Giovanni
AU - Meghir, Costas
AU - Violante, Giovanni L.
N1 - Funding Information:
J. J. Heckman for helpful comments and guidance. We received valuable feedback from numerous individuals and participants at conferences and seminars. We are grateful to Chris Tonetti and Emily Nix for excellent research assistance at an early stage of this project. Meghir thanks the Economic and Social Research Council for funding under the Professorial Fellowship RES-051-27-0204, the Cowles Foundation, and the Institution for Social and Policy Studies at Yale. Abbott and Gallipoli acknowledge financial support from the Canadian Labour Market and Skills Researcher Network and the Social Sciences and Humanities Research Council in Canada. We alone are responsible for all errors and interpretations. Data are provided as supplementary material online.
Funding Information:
This paper was originally circulated under the title ?Equilibrium Effects of Education Policies: A Quantitative Evaluation.? We are grateful to six anonymous referees and the editor J. J. Heckman for helpful comments and guidance. We received valuable feedback from numerous individuals and participants at conferences and seminars. We are grateful to Chris Tonetti and Emily Nix for excellent research assistance at an early stage of this project. Meghir thanks the Economic and Social Research Council for funding under the Professorial Fellowship RES-051-27-0204, the Cowles Foundation, and the Institution for Social and Policy Studies at Yale. Abbott and Gallipoli acknowledge financial support from the Canadian Labour Market and Skills Researcher Network and the Social Sciences and Humanities Research Council in Canada. We alone are responsible for all errors and interpretations. Data are provided as supplementary material online.
Publisher Copyright:
© 2019 by The University of Chicago. All rights reserved.
PY - 2019/12/1
Y1 - 2019/12/1
N2 - We examine the equilibrium effects of college financial aid policies building an overlapping-generations life cycle model with education, labor supply, and saving decisions. Cognitive and noncognitive skills of children depend on parental education and skills and affect education and labor market outcomes. Education is funded by parental transfers that supplement grants, loans, and student labor supply. Crowding out of parental transfers by government programs is sizable and cannot be ignored. The current system of federal aid improves long-run welfare by 6 percent. More generous ability-tested grants would increase welfare and dominate both an expansion of student loans and a labor tax cut.
AB - We examine the equilibrium effects of college financial aid policies building an overlapping-generations life cycle model with education, labor supply, and saving decisions. Cognitive and noncognitive skills of children depend on parental education and skills and affect education and labor market outcomes. Education is funded by parental transfers that supplement grants, loans, and student labor supply. Crowding out of parental transfers by government programs is sizable and cannot be ignored. The current system of federal aid improves long-run welfare by 6 percent. More generous ability-tested grants would increase welfare and dominate both an expansion of student loans and a labor tax cut.
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U2 - 10.1086/702241
DO - 10.1086/702241
M3 - Article
AN - SCOPUS:85063918992
SN - 0022-3808
VL - 127
SP - 2569
EP - 2624
JO - Journal of Political Economy
JF - Journal of Political Economy
IS - 6
ER -