positively skewed. Our best guess of ex ante risk in university education is a coefficient of variation of about 0.3, comparable …

. Real options may help to explain a larger human capital premium for higher education, smaller responsiveness of higher … education investments to financial incentives, and larger sensitivity of higher education to low-return outcomes and human … standard human capital model. A flat income tax remains neutral if education expenditures are fully deductible. …

Should a redistributive government optimally subsidize education to provoke a reduction in the skill premium through … income taxes and education subsidies in two-type models with endogenous human capital formation, endogenous labor supply, and … endogenous wage rates. Under optimal linear policies, education should not be subsidized so as to reduce the skill premium …

We develop a model of education where individuals face educational risk. Successfully entering the skilled labor sector … depends on individual effort in education and public resources, but educational risk still causes (income) inequality. We show …, because combining skill-specific tuition fees and public education spending provide both insurance and redistribution at lower …

In this model of education, where individuals are exposed both to educational risk and to wage risk within the skilled … enhancing the quality of education. The necessary expenditures are optimally financed by regressive tuition fees and the net …

. The quantity and quality are jointly set by a government agency wishing to maximize the quality of basic education per … stages of education: basic and advanced (college), the latter being required of teachers. The cost of hiring teachers is … workers, hence to the college premium. We show that this will exacerbate the negative trends in the quality of basic education …

linear labor tax rate and optimal linear education subsidies. The optimal income tax trades off social insurance against … incentives to work and to invest in human capital. Education subsidies are not used for social insurance, but are only targeted … at off-setting the distortions of the labor tax and internalizing a fiscal externality. Both optimal education subsidies …

. If education is complementary to labor effort, education should be subsidized to offset tax distortions on labor supply …. However, if most of the education is enjoyed by high ability households, education should be taxed in order to redistribute … resources to the poor. The paper identifies the exact conditions under which these two effects cancel and education should be …

expansion of school attainment has not guaranteed improved economic conditions. This paper reviews the role of education in …

. The critical idea is that attending college is both an investment good and a consumption good. If education has a … college, thus reducing the social returns to education and increasing the college's cost of education. We find that … education government should means-test grants. We thus provide a rationale for means-tested tuition and grants which relies …