Altruistic parents, who differ in income, make financial transfers to their children, who differ in ability. The … two policy tools: a subsidy to those who participate in education and a proportional income tax. Not all children … participate; a larger subsidy encourages participation, and a larger income tax discourages it. The parents, prior to making …

. When only skilled workers are mobile, there is a sub-optimal shift from taxes to fees and the number of students is too low …. When also students can migrate, there is a countervailing force such that maintaining the optimal financial mix becomes …

selective colleges to lower their curricular demands, low-ability students benefit at the expense of medium-ability students … better serve their most able students. This stylized model of curricular product differentiation in higher education offers …