This paper studies the long-run macroeconomic, distributional and welfare effects of tuition policy and student loans. We therefore form a rich model of risky human capital investment based on the seminal work of Heckman, Lochner and Taber (1998). We extend their original model by variable labor...

We examine whether parental and school investments reinforce or compensate for student performance. Our analysis exploits school-starting-age rules in 34 countries, capturing achievement variation that arises because younger children typically underperform their older peers. Parents respond to...