This paper compares partial and general equilibrium effects of alternative financial aid policies intended to promote college participation. We build an overlapping generations life-cycle, heterogeneous-agent, incomplete-markets model with education, labour supply, and consumption/saving...

This paper examines the equilibrium effects of alternative financial aid policies intended to promote college participation. We build an overlapping generations life cycle model with education, labor supply, and consumption/saving decisions. Cognitive and non-cognitive skills of children depend...

Through certainty equivalent consumption (CE) measures, we show that dispersion of current earnings, expenditures, and net worth overstate welfare inequality. This is largely due to the unaccounted value of future earnings, which we call human wealth. The latter mitigates permanent-income...

This paper examines the equilibrium effects of alternative financial aid policies intended to promote college participation. We build an overlapping generations life-cycle, heterogeneous-agent, incomplete-markets model with education, labor supply, and consumption/saving decisions. Driven by...

We use a labor search model with heterogenous households and firms to study the efficacy of a wage subsidy during a pandemic, relative to enhancing unemployment benefits. A large proportion of the economy is forced to shut down, and firms in that sector choose whether to lay off workers or keep...

Many governments set up large public preschool programs in order to expand ac- cess to early education (crowd-in). Public preschools, however, tend to crowd-out private preschool enrollment. This makes such programs less cost-effective because public finances are used to pay for preschool for...

A method to impute consumption expenditure inequality between wealth groups in the Survey of Consumer Finances is provided, allowing for measurement error that is correlated with income and wealth. Identification is derived from observing food at home and food away from home, which are relative...

The effect of incomplete markets on parental investments is investigated. Uninsured risk and credit constraints can distort the timing of parental investments, causing them to be delayed relative to what would occur under full-insurance. Age-dependent subsidies, taxes or transfers can all...

This paper critically appraises the approaches that have characterized the literature on the macroeconomic effects of job reallocations. Since Lilien's (1982) seminal contribution there has been a flourishing of empirical analysis but no unifying theoretical framework has obtained consensus in...

Non-stationary income processes are standard in quantitative life-cycle models, prompted by the observation that within-cohort income inequality increases with age. This paper generalizes Tauchen (1986) and Rouwenhorst's (1995) discretization methods to non-stationary AR(1) processes. We...