A model is presented where universities competitively supply education to mobile students. Students are subject to a liquidity constraint so that tuition must be paid out of pre-university income. It is shown that student loans provided by home jurisdictions will ensure an efficient quality of...

We model a higher education system that admits students according to their admission signal (e.g., matriculation GPA, SAT), which is, in turn, affected by their cognitive ability and socioeconomic background. We show that subsidizing education loans increases neither human capital stock nor...

In academia, a subset of faculty has tenure, which allows its beneficiaries to retain their professorships without mandatory retirement and with only limited grounds for revocation. Proponents of tenure argue it protects intellectual freedom and encourages investment in human capital. Detractors...