Essays In Human Capital And Education Finance

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Essays In Human Capital And Education Finance

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Author : Constantine N. Yannelis
language : en
Publisher:
Release Date : 2016

Essays In Human Capital And Education Finance written by Constantine N. Yannelis and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with categories.

This dissertation examines several empirical questions in human capital and education finance. My main research agenda focuses on how to design an efficient system for human capital investments. Student loans exist to alleviate credit constraints, which can arise due to imperfect information. This dissertation focuses on how to design a system for human capital investments by examine key components of educational borrowing. The following chapters focus on the effects of credit constraints, how these arise and document recent trends in educational borrowing in the United States. This has become a key issue in government finance, as student loans are now the largest source of non-mortgage household debt in the United States. Chapter 1 focuses on the whether credit constraints affect demand for higher education. This chapter uses staggered bank branching deregulation across states in the United States to examine the impact of the resulting increase in the supply of credit on college enrollment from the 70s to early 90s. The research design produces estimates that are not confounded by wealth effects. Lifting branching restrictions raises college enrollment by about 2 percentage points (4%). The results rule out alternative interpretations to the credit constraints channel. First, the effects are largest for low and middle income families, while insignificant for upper income families as well as bankrupt families who would have been unaffected by the increased access to private credit. Second, the effect of lifting branching restrictions subsided immediately following periods of increased loan limit through government student loan programs. We also show that household educational borrowing increased as a result of lifting branching restrictions. The results provide novel evidence that credit constraints play an important role in determining household college enrollment decisions in the United States. This chapter is coauthored with my classmate Stephen Teng Sun. Chapter 2 studies information asymmetries in the student loan market. This chapter examines the rise in student loan delinquency and default drawing on administrative data on federal student borrowing, matched to earnings records from de-identified tax records. Most of the increase in default is associated with the rise in the number of borrowers at for-profit schools and, to a lesser extent, community colleges and certain other non-selective institutions, whose students had historically composed only a small share of borrowers. These non-traditional borrowers were drawn from more disadvantaged circumstances, attended institutions with relatively weak educational outcomes, and experienced poor labor market out- comes after entering repayment. In contrast, default rates among borrowers attending most 4-year public and private institutions and graduate borrowers who represent the vast majority of the federal loan portfolio have remained low, despite the severe re- cession and their relatively high loan balances. Their generally high earnings, low rates of unemployment, and greater family resources appear to have enabled them to avoid adverse loan outcomes even during times of hardship. Decomposition analysis results indicate that changes in characteristics of borrowers and the institutions they attended explain much of the doubling in default rates between 2000 and 2010, with changes in the type of schools attended, debt burdens, and labor market outcomes of non-traditional borrowers at for-profit and community colleges explaining the largest share.

Three Essays On Human Capital Child Care And Growth And On Mobility

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Author : Rizwana Alamgir-Arif
language : en
Publisher:
Release Date : 2012

Three Essays On Human Capital Child Care And Growth And On Mobility written by Rizwana Alamgir-Arif and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012 with Child care categories.

This thesis contributes to the fields of Public Economics and Development Economics by studying human capital formation under three scenarios. Each scenario is represented in an individual paper between Chapters 2 to 4 of this thesis. Chapter 2 examines the effect of child care financing, through human capital formation, on growth and welfare. There is an extensive literature on the benefits of child care affordability on labour market participation. The overall inference that can be drawn is that the availability and affordability of appropriate child care may enhance parental time spent outside the home in furthering their economic opportunities. In another front, the endogenous growth literature exemplifies the merits of subsidizing human capital in generating growth. Again, other contributions demonstrate the negative implications of taxes on the returns from human capital on long run growth and welfare. This paper assesses the long run welfare implications of child care subsidies financed by proportional income taxes when human capital serves as the engine of growth. More specifically, using an overlapping-generations framework (OLG) with endogenous labour choice, we study the implications of a distortionary wage income tax on growth and welfare. When the revenues from proportional income taxes are channelled towards improving economic opportunities for both work and schooling investments in the form of child care subsidies, long run physical and human capital stock may increase. A higher level of growth may ensue leading to higher welfare. Chapter 3 answers the question of how child care subsidization works in the interest of skill formation, and specifically, whether child care subsidization policies can work to the effect of human capital subsidies. Ample studies have highlighted the significance of early childhood learning through child care in determining the child's longer-term outcomes. The general conclusion has been that the quality of life for a child, higher earnings during later life, as well as the contributions the child makes to society as an adult can be traced back to exposures during the first few years of life. Early childhood education obtained through child care has been found to play a pivotal role in the human capital base amongst children that can benefit them in the long run. Based on this premise, the paper develops a simple Overlapping Generations Model (OLG) to find out the implications of early learning on future investments in human capital. It is shown that higher costs of child care will reduce skill investments of parents. Also, for some positive child care cost, higher human capital obtained through early childhood education can induce further skill investments amongst individuals with a higher willingness to substitute consumption intertemporally. Finally, intervention that can internalize the intra-generational human capital externalities arising from parental time spent outside the home - for which care/early learning is required to be purchased for the child - can unambiguously lead to higher skill investments by all individuals. Chapter 3 therefore proposes policy intervention, such as child care subsidization, as the effect of such will be akin to a human capital subsidy. The objective of Chapter 4 is to understand the implications of inter-regional mobility on higher educational investments of individuals and to study in detail the impact of mobility on government spending for education under two particular scenarios --one in which human capital externalities are non-localized and spill over to other regions (e.g. in the form of R & D), and another in which the externalities are localized and remain within the region. It is shown that mobility enhances private investments in education, and all else equal, welfare should be higher with increased migration. The impacts on government educational expenditures are studied and some policy implications are drawn. In general, with non-localized externalities, all public expenditures decline under full-migration. Finally under localized externalities, the paper finds that governments will increase their financing of education to increasingly mobile individuals only when agglomeration benefits outweigh congestion costs from increases in regional population.

Essays On Financial Market Imperfections And Human Capital Accumulation

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Author : Constantinos Panayiotis Christou
language : en
Publisher:
Release Date : 1994

Essays On Financial Market Imperfections And Human Capital Accumulation written by Constantinos Panayiotis Christou and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1994 with Credit categories.

Three Essays On Human Capital

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Author : Xiaoyan Chen Youderian
language : en
Publisher:
Release Date : 2012

Three Essays On Human Capital written by Xiaoyan Chen Youderian and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012 with categories.

The first essay considers how the timing of government education spending influences the intergenerational persistence of income. We build a life-cycle model where human capital is accumulated in early and late childhood. Both families and the government can increase the human capital of young agents by investing in education at each stage of childhood. Ability in each dynasty follows a stochastic process. Different abilities and resultant spending histories generate a stochastic steady state distribution of income. We calibrate our model to match aggregate statistics in terms of education expenditures, income persistence and inequality. We show that increasing government spending in early childhood education is effective in lowering intergenerational earnings elasticity. An increase in government funding of early childhood education equivalent to 0.8 percent of GDP reduces income persistence by 8.4 percent. We find that this relatively large effect is due to the weakening relationship between family income and education investment. Since this link is already weak in late childhood, allocating more public resources to late childhood education does not improve the intergenerational mobility of economic status. Furthermore, focusing more on late childhood may raise intergenerational persistence by amplifying the gap in human capital developed in early childhood. The second essay considers parental time investment in early childhood as an education input and explores the impact of early education policies on labor supply and human capital. I develop a five-period overlapping generations model where human capital formation is a multi-stage process. An agent's human capital is accumulated through early and late childhood. Parents make income and time allocation decisions in response to government expenditures and parental leave policies. The model is calibrated to the U.S. economy so that the generated data matches the Gini index and parental participation in education expenditures. The general equilibrium environment shows that subsidizing private education spending and adopting paid parental leave are both effective at increasing human capital. These two policies give parents incentives to increase physical and time investment, respectively. Labor supply decreases due to the introduction of paid parental leave as intended. In addition, low-wage earners are most responsive to parental leave by working less and spending more time with children. The third essay is on the motherhood wage penalty. There is substantial evidence that women with children bear a wage penalty of 5 to 10 percent due to their motherhood status. This wage gap is usually estimated by comparing the wages of working mothers to childless women after controlling for human capital and individual characteristics. This method runs into the problem of selection bias by excluding non-working women. This paper addresses the issue in two ways. First, I develop a simple model of fertility and labor participation decisions to examine the relationships among fertility, employment, and wages. The model implies that mothers face different reservation wages due to variance in preference over child care, while non-mothers face the same reservation wage. Thus, a mother with a relatively high wage may choose not to work because of her strong preference for time with children. In contrast, a childless woman who is not working must face a relatively low wage. For this reason, empirical analysis that focuses only on employed women may result in a biased estimate of the motherhood wage penalty. Second, to test the predictions of the model, I use 2004-2009 data from the 1997 National Longitudinal Survey of Youth (NLSY97) and include non-working women in the two-stage Heckman selection model. The empirical results from OLS and the fixed effects model are consistent with the findings in previous studies. However, the child penalty becomes smaller and insignificant after non-working women are included. It implies that the observed wage gap in the labor market appears to overstate the child wage penalty due to the sample selection bias.

Three Essays On Investment In Human Capital In Canada

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Author : Aboudrahyme Savadogo
language : en
Publisher:
Release Date : 2016

Three Essays On Investment In Human Capital In Canada written by Aboudrahyme Savadogo and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with categories.

This thesis investigates investment in human capital in Canada including the contribution of financial assistance to students, the profitability of investment in postsecondary education and the income redistribution. It is divided in five chapters. The first chapter presents a chronological survey of microeconomics studies on investment in human capital. It also summarizes Canadian studies on investment in education and highlights the main limitations of these studies, particularly in terms of how they disregard the heterogeneity of grant and tax system among Canadian provinces and the sharing of benefits and costs of investment in education in Canada. The second chapter presents the methodology of measurement of returns to education and gains from investment in education. It describes data used the results of the econometric regressions. Finally, the chapter presents SIMAID, a calculator of financial assistance to students developed for the purpose of this dissertation with the aim to estimate the amount of grant to which each student is entitled to according his/her personal and family characteristics. In its first section, the third chapter reports social, private and public returns to education and shows that returns vary across provinces, fields of study, gender and cohort of birth year and decline with respect to the level of education. In its second section, the chapter shows a positive impact of financial assistance on returns to a B.A. degree of 24.3% and 9.5% in Quebec and Ontario respectively. Finally, the chapter indicates that a substitution of Quebec's grant system with Ontario'ssystem decreases private returns to a B.A. degree by -11.9% while a change of Quebec's tax for Ontario's system raises private returns to a B.A. degree by +4.5%. The combined effect of both a change of grant and tax systems on private returns to a B.A. is a 7.4% decline. The fourth chapter provides a detailed title-by-title accounting decomposition of social, private and public gains from investment in education. The social gain from an investment in a B.A. degree is $738,384 dollars in Quebec and $685,437 in Ontario. This gain varies from one field of study to another, with the lowest level in the humanities and the highest level in engineering studies. The chapter shows that the sharing of benefits from investment in education between individuals and government regarding the sharing of costs is more equitable in Ontario than in Quebec. Indeed, an individual who invests in education in Quebec supports 51.6% of the total costs of investment and earns 64.8% of the social gain while the same individuals will support 62.9% of social costs and earn 62.2% of social gain if he/she invest in education in Ontario. Finally, the fifth chapter reports on and analyzes the redistributive effects of taxes and transfers due to investment in education. It also investigates whether or not the financial assistance to students program is actually in favour of the poorest individuals. The argument from which a grant is provided to poor individual is overturned when analyzing the distribution of permanent income. Indeed, we find that 79% of grant beneficiaries are in the richest quintile (Q5) of permanent incomes. The chapter also shows that investment in education positively impacts the redistributive effect in 2006, 2001 and 1996 and negatively in 1991 and 2011. The impact is also observable on the components of the redistributive effects. However, its sensitivity to the discount rate varies with respect to the index used in the analysis.

Essays On Human Capital And Finance

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Author : Miguel Palacios
language : en
Publisher:
Release Date : 2009

Essays On Human Capital And Finance written by Miguel Palacios and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009 with categories.

Essays On Human Capital Institutions And Economic Growth

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Author : Babar Hussain
language : en
Publisher:
Release Date : 2011

Essays On Human Capital Institutions And Economic Growth written by Babar Hussain and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011 with categories.

Essays On The Economics Of Education And Human Capital

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Author : Chester William Polson
language : en
Publisher:
Release Date : 2015

Essays On The Economics Of Education And Human Capital written by Chester William Polson and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with categories.

This dissertation examines several facets of the current educational landscape in the United States and the impacts these characteristics have on individual outcomes. The first chapter examines high stakes exit exams, which are pervasive in the American education system and have the ability to impact students far beyond their earned scores. This chapter considers how exit exams in Texas impact student behavior and human capital formation before the end of high school. Employing a regression discontinuity framework, I examine the impact of failing the exam the first time it is administered for students within a small window of scores around the passing threshold. Considering behavioral responses to the administration of the Texas Assessment of Knowledge and Skills (TAKS), I study the impact on students' courses taken, attendance, and a set of disciplinary actions after the exam in the final year of high school. I find that, in line with a model of motivation with heterogeneous effects, students who fail do respond through an increase in the number of courses taken in their senior year, and find a smaller increase in disciplinary infractions. I then consider heterogeneity among student subgroups to discern whether the TAKS exam has differential impacts across different portions of the high school population in Texas. The second chapter quantifies the extent to which test scores and demographic variables account for the differing high school graduation rates between minority and white students in Texas. There are persistent, well documented gaps in both achievement on standardized tests and high school diploma receipt between minority students and their white peers. I employ a set of linear probability models to estimate the graduation gap for students who were eighth graders in Texas from 2003-2009 and examine specific sub-populations to try to disentangle some of the factors that could be contributing to these gaps. I find that student observable characteristics, especially test scores, can account for a substantial portion of this gap, which supports estimates in the previous literature. The third chapter of my dissertation examines how merit-based scholarships, instead of need-based financial aid, impact the decisions students make when enrolling in post-secondary education. Using the 2000 US Census data and American Community Survey data from 2001-2010, I evaluate the effect of merit scholarships in Tennessee on current college enrollment using difference-in-difference estimation. In contrast to the estimated effects of merit scholarships in Georgia, the Tennessee Education Lottery Scholarship does not seem to impact student behavior; estimates are mildly negative but not statistically different from zero considering the whole population of youth ages 16-26, traditional college enrollees ages 18-19, or older students aged 20-22. I argue these estimates are in line with many more recent findings examining merit scholarship programs. Finally, I employ a synthetic control method to compare these estimates with more traditional estimation strategies.

Investing In Human Capital

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Author : Miguel Palacios Lleras
language : en
Publisher: Cambridge University Press
Release Date : 2004-03-11

Investing In Human Capital written by Miguel Palacios Lleras and has been published by Cambridge University Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2004-03-11 with Business & Economics categories.

Most higher education finance literature assumes that students cannot pledge their future earnings to finance their education in a free society. Investing in Human Capital, first published in 2004, challenges that assumption and explores human capital contracts as an alternative mechanism for financing higher education. Investing in Human Capital tracks the roots of the idea behind human capital contracts, discusses the beneficial consequences they would have on students and on higher education markets, and describes how they can develop in light of the innovations that have taken place in financial markets during the last decades. The book also explores the challenges - ethical and financial - that such instruments face and offers implementation alternatives that can bring about their existence in the context of a national higher education financing programme.

Essays On Human Capital And Financial Markets

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Author : Euikyu Choi
language : en
Publisher:
Release Date : 2016

Essays On Human Capital And Financial Markets written by Euikyu Choi and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with categories.

This dissertation examines various aspects of human capital and their linkage to the financial markets. The first chapter empirically shows that the cost of debt is systematically higher for firms that operate in mobile labor markets. We posit two channels through which labor mobility could positively affect firms' cost of debt. First, relates to greater default risk arising from potential loss of key personnel and a corresponding reduction in future cash flows, while the second relates to lower liquidation value (collateral) given that the firms' human capital is more transient, which reduces pledgeable assets. Using across state, cross-sectional variations in the degree of enforceability of non-compete agreements which restrict employee mobility as a proxy for anticipated labor mobility, and state-level reforms to non-compete laws to capture exogenous shocks to labor mobility, we find that labor mobility (inverse of the strength of non-compete enforceability) has a significantly positive effect on the credit spreads of public corporate bonds (our measure of the cost of debt) issued from 1990 - 2014 for large, U.S. industrial firms. Moreover, the analysis reveals that the effect of labor mobility is greater for firms that are located in states which have a higher concentration of industry rivals or for firms that are comprised primarily of professional, knowledge workers, which corroborates the main results. Overall, these findings suggest that creditors price financial contracts by taking into account the risk that arises from labor mobility. The second chapter examines the effect of shareholder monitoring on the relation between human capital and firm value. The extant literature suggests that influential, concentrated ownership facilitates close shareholder monitoring and reduces information asymmetries between shareholders and the firm (Demsetz, 1985; Anderson and Reeb, 2003). Yet, intense monitoring by shareholders can impede employees' initiatives and effort (Shleifer and Vishny, 1988; Burkart, Gromb, and Panunzi, 1997). We argue that such a cost can be significant when firm output relies on specialized - rather than more generic - human capital, which require self-motivation and autonomy to be productive. Consistent with our argument, the empirical evidence indicates that firm value suffers in the presence of highly influential ownership, but only when firm productivity depends on specialized human capital. We do not find such an effect when human capital is more generalized. Specifically, we observe that an equity portfolio that is long on firms with influential ownership and short on firms without influential ownership earns a significantly negative abnormal return from 2002 to 2010, but again, only for firms with specialized human capital. Overall, our results delineate the importance of considering the linkages between human capital and financial markets, which could impact the allocation of capital in the economy, and moreover, on economic growth.