This paper analyzes how integrated labor markets affect the financing of higher education. For this, we employ a general-equilibrium model with overlapping generations and individuals who differ in their abilities. At the first stage, governments can choose the quality of education and the...

It is well known that higher education financing involves uncertainty and risk with respect to students' future economic fortunes, and an unwillingness of banks to provide loans because of the absence of collateral. It follows that without government intervention there will be both socially...