This paper proposes a stylized model of policy determination and imperfect international integration. A country-specific policy wedge corrects labor market imperfections and/or redistributes welfare across differently wealthy agents. Capital market integration with the rest of the world, indexed...

Frequent non-completion in optional education can be efficient if dropouts optimally exercise an option rationally foreseen by previous enrollment choices. This paper shows that in educational opportunities and groups of students where enrollment resolves more pronounced individual uncertainty...