We present a tractable stochastic endogenous growth model that explains how social capital influences economic development. In our model, social capital increases citizens' awareness of government activity. Hence, it alleviates the electoral incentives to under- invest in education, whose...

Whereas public student loans are often income contingent, private banks typically offer pure loans, or don't offer loans at all. In order to provide a rationale for these observations, we present a model with perfectly competitive banks and risk averse students who have private information on...

This paper is the first to use a randomized trial in the US to analyze the short- and long-term educational and employment impacts of an afterschool program that offered disadvantaged high-school youth: mentoring, educational services, and financial rewards with the objective to improve...

Since World War II, the United States government has made improved access to higher education a priority. This effort has substantially increased the number of people who complete college - generally thought to be a good thing. We show, however, that such policies can actually increase income...

This paper is the first to use a randomized trial in the US to analyze the short- and long-term impacts of an afterschool program that offered disadvantaged high-school youth: mentoring, educational services, and financial rewards to attend program activities, complete high-school and enroll in...

In a financial contracting model, we study the optimal debt structure to resolve financial distress. We show that a debt structure where two distinct debt classes co-exist – one class fully concentrated and with control rights upon default, the other dispersed and without control rights...