Education Policy and Intergenerational Transfers in Equilibrium

• 成果类型: Article
• 署名作者: Abbott, Brant; Gallipoli, Giovanni; Meghir, Costas; Violante, Giovanni L.
• 署名单位: Queens University - Canada; University of British Columbia; Yale University; National Bureau of Economic Research; Princeton University
• 刊物名称: JOURNAL OF POLITICAL ECONOMY
• ISSN/ISSBN: 0022-3808
• DOI: 10.1086/702241
• 发表日期: 2019
• 页码: 2569-2624
• 关键词: dynamic discrete-choice; borrowing constraints; life-cycle; consumption inequality; credit constraints; college; income; TECHNOLOGY; returns; GROWTH

摘要

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.