We study human capital accumulation in an environment of competitive search. Given that unemployed workers can default on their education loans, skilled individuals with a larger debt burden prefer riskier but better paid careers than is socially desirable. A higher level of employment risk in...

This paper investigates how the abolishment of a ban on tuition fees affects the quality of higher education with centralized and decentralized decision making. It is shown that a marginal introduction of tuition fees fully crowds out public funds under centralization, whereas educational...

Der vorliegende Artikel unterzieht das Argument der externen Effekte im Bildungsbereich einer kritischen Prüfung und zeigt mögliche Konsequenzen für die Rechtfertigung öffentlicher Bildungsfinanzierung auf. Hierzu erfolgt zunächst eine differenzierte Betrachtung des "Gutes" Bildung. Daran...

This paper presents a model showing an incentive for a group of people to vote for higher tuition fees, even if these fees have no quality effect. The incentive is based on a non-monetary influence on utility, namely the social status or prestige of graduating. The basic assumption is that the...

Considering the investment in education as uncertain financial decision making we modify the short-cut method of calculating rates of return to education by incorporating the risk premium. Recognizing that market risk isn't the only factor affecting returns, we estimate the returns to education...

We analyse how state university competition to collect resources may affect both research and the quality of teaching. By considering a set-up where two state universities behave strategically, we model their interaction with potential students as a sequential noncooperative game. We show that...

We provide a normative analysis of endogenous student and worker mobility in the presence of diverging interests between universities and governments. Student mobility generates a university competition effect which induces them to overinvest in education, whereas worker mobility generates a...

The average voting procedure reflects the weighted average of expressed opinions in [0,1]. Participants typically behave strategically. We evaluate the discrepancy between the average taste and the average vote. If the population is sufficiently large, it is possible to construct approximations...

We examine ways of funding higher education, comparing upfront tuition fees with graduate taxes. The tax dominates, as volatility in future income is transferred from risk-averse students to the risk-neutral state. However, a double moral hazard problem arises when students' efforts to raise...

In higher education pure credit market funding leads to underinvestment while income-contingent loans funding tends to produce overinvestment. We analyze whether a market structure in which both funding schemes coexist and compete against each other might restore efficiency of the educational...