We assume that students can acquire a wage premium, thanks to studies, and form a rational expectation of their future … earnings, which depends on personal ability. Students receive a private, noisy signal of their ability, and universities can … of test scores. Students optimally self-select as a result of pricing only. If capital markets are perfect but …

Working has become commonplace among college students; however, this activity can have unexpected financial … consequences. Federal formulas implicitly tax the amount of financial aid students are eligible to receive by as much as 50 cents … for each marginal dollar of income. This tax creates an incentive for college students to reduce income, though abstruse …