Altruistic parents, who differ in income, make financial transfers to their children, who differ in ability. The children invest in post-compulsory education, subject to an endogenous credit constraint, and taking policy as given. There are two policy tools: a subsidy to those who participate in...

This paper is inspired by a puzzling empirical fact that despite the importance of controlling migration for their future, the host countries allocate very limited amounts of resources to the struggle against illegal immigration. The present model analyzes this issue in the context of low...