We develop a human capital model with borrowing constraints explicitly derived from government student loan programs and private lending under limited commitment. Two key implications of our analysis are: (i) binding constraints may not depress investment; and (ii) a positive relationship...

We apply theories of capital market failure to ana1yzeoptima1 financing of risky higher education. In the market solution,students can only finance their education through debt. There isunderinvestment in human capita1, because some students with socia1lyprofitable investments in human capita1...

Understanding how policy can affect university participation is important for understanding how governments can promote human capital accumulation. In this paper, we estimate the separate impacts of tuition fees and maintenance grants on the decision to enter university in the UK. We use Labour...

We develop a human capital model with borrowing constraints explicitly derived from government student loan programs and private lending under limited commitment. Two key implications of our analysis are: (i) binding constraints may not depress investment; and (ii) a positive relationship...

"This paper studies the nature and impact of credit constraints in the market for human capital. We derive endogenous constraints from the design of government student loan programs and from the limited repayment incentives in private lending markets. These constraints imply cross-sectional...