DMCA
2009): “Equilibrium Effects of Education Policies: a Quantitative Evaluation,” UCL Working paper
| Citations: | 25 - 3 self |
BibTeX
@MISC{Gallipoli_2009):“equilibrium,
author = {Giovanni Gallipoli and Costas Meghir and Giovanni L. Violante},
title = {2009): “Equilibrium Effects of Education Policies: a Quantitative Evaluation,” UCL Working paper},
year = {}
}
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Abstract
This paper compares the partial and general equilibrium effects of alternative education policies on the distribution of education and earnings. We build a life-cycle model with endogenous labor supply, consumption/saving and education choices, allowing for agents’ heterogeneity in several dimensions and for incomplete insurance markets. The model internalizes the dynamic life-cycle effects of access to family resources by allowing altruistic parents to make a voluntary inter-vivos transfer to their child at the beginning of the child’s independent life. PSID and NLSY data are used to estimate education-specific dynamic earnings processes, and the distribution of ability in the population as well as the size of transfers in different population groups. Using NLSY data, we estimate a transition process for ability which concisely characterizes the intergenerational transfer of skills. Through numerical simulations, we compare the effects of alternative policy interventions on optimal education decisions, inequality, and output. In particular, we experiment with conditional tuition subsidies. While in partial equilibrium such policies can be very effective in increasing education levels and reducing inequality, in general
Keyphrases
ucl working paper quantitative evaluation equilibrium effect education policy nlsy data endogenous labor supply family resource dynamic life-cycle effect education choice general equilibrium effect different population group altruistic parent education-specific dynamic earnings process education level agent heterogeneity life-cycle model incomplete insurance market consumption saving child independent life alternative education policy conditional tuition subsidy alternative policy intervention several dimension partial equilibrium policy transition process numerical simulation optimal education decision voluntary inter-vivos transfer intergenerational transfer
