Assuming a two-period model with endogenous choices of labour, education, and saving, it is shown to be second-best efficient to deviate from Ramsey's Rule and to distort qualified labour less than nonqualified labour. The result holds for arbitrary utility and learning functions. Efficient...

We exploit variation stemming from school consolidations in Denmark from 2010-2011 to analyze the impact on student achievement as measured by test scores. For each student we observe enrollment and test scores one year prior to school consolidation and up to four years after. We find that...

This paper examines inequalities in the match between student and degree quality using linked administrative data from schools, universities and tax authorities. We analyse two measures of match at the university-subject level: undergraduate enrollment qualifications, and graduate earnings. We...

Since the 1980s the United States has faced growing disinterest and high attrition from STEM majors. Over the same period, foreign-born enrollment in U.S. higher education has increased steadily. This paper examines whether foreign-born peers affect the likelihood American college students...

Should education be subsidized for the purpose of redistribution? The usual argument against subsidies to education above the primary level is that the rich take up most education, so a subsidy would increase inequality. We show that there is a counteracting effect: an increase in the stock of...

This paper explores students' expectations about the returns to completing higher education and provides first evidence on perceived signaling and human capital effects. We elicit counterfactual labor market expectations for the hypothetical scenarios of leaving university with or without a...

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 that an optimal public policy consists of...

In this paper, we quantitatively assess the welfare implications of alternative public education spending rules. To this end, we employ a dynamic stochastic general equilibrium model in which human capital externalities and public education expenditures, financed by distorting taxes, enhance the...