Educational Policy and Skill Heterogeneity with Credit Market Imperfections

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dc.contributor.authorFender, John
dc.contributor.authorWang, Ping
dc.date.accessioned2020-09-13T18:10:28Z
dc.date.available2020-09-13T18:10:28Z
dc.date.issued2000
dc.description.abstractAn overlapping-generations model where agents choose whether to become educated when young is presented. Education enhances productivity, but needs to be financed by borrowing. Because of the possibility of default, lenders may ration credit. We characterize the steady-state equilibrium with and without credit constraints and show that credit rationing tends to be associated with lower education and a lower real interest rate. We then examine the role of public policy in remedying the inefficiency which occurs in the presence of credit rationing and derive results on optimal public education spending and on allocative and distributional issues.
dc.description.departmentEconomics
dc.identifier.urihttp://hdl.handle.net/1803/15632
dc.language.isoen_US
dc.publisherVanderbilt Universityen
dc.subject.other
dc.titleEducational Policy and Skill Heterogeneity with Credit Market Imperfections
dc.typeWorking Paperen
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