Educational and Wage Risk: Public Insurance and Incentives
نویسندگان
چکیده
In a model of education, where individuals are exposed to educational risk and to wage risk within the skilled sector, successful graduation depends both on individual effort to study and on public resources. We show that insuring these risks is a dichotomic task: Wage risk is diversified among the skilled by graduate taxation and skill-contingent loans. Educational risk of failure is mitigated by increased educational opportunities via public spending on the quality of the educational sector. These expenditures are optimally financed by regressive tuition fees and the net revenue from the graduate tax. A general wage tax is not used and labor supply of unskilled workers remains undistorted. JEL-Classification: H21, I2, J2
منابع مشابه
Insuring Educational Risk: Opportunities versus Income∗
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