The Economics of Screening and Risk Sharing in Higher Education : Human Capital Formation, Income Inequality, and Welfare.
- 1st ed.
- 1 online resource (190 pages)
Front Cover -- The Economics of Screening and Risk Sharing in Higher Education: Human Capital Formation, Income Inequality, and Welfare -- Copyright -- Contents -- Preface -- Chapter 1: Uncertainty and Screening: Preliminary Notions -- 1.1 Information System -- Favorableness Ordering of Signals: Good News and Bad News -- 1.2 Real State and Signal Spaces -- 1.3 Informativeness Orderings -- 1.3.1 The Blackwell Criterion -- Information and Welfare -- Real State and Signal Spaces -- 1.3.2 The Kim Criterion -- 1.3.3 Uniform Signal Distribution -- Appendix to Chapter 1 -- Chapter 2: Screening Information in Equilibrium -- 2.1 Value of Information in Exchange Economies -- Null Information -- Full Information -- A Generalization of the Hirshleifer Example -- 2.2 Value of Information in Production Economies -- 2.2.1 Complete Risk Sharing Arrangements -- 2.2.1.1 Description of the Model -- 2.2.1.2 Economic Welfare -- 2.2.1.3 The Value of Information in the Absence of Risk Sharing -- 2.2.1.4 The Value of Information with Complete Risk Sharing -- 2.2.2 Incomplete Risk Sharing Arrangements -- Information and Economic Welfare -- 2.2.2.1 The Value of Information on the Nontradable Risk -- 2.2.2.2 The Value of Information on the Tradable Risk -- Appendix to Chapter 2 -- Chapter 3: Evidence on Higher Education and Economic Performance -- 3.1 Higher Education and Economic Development -- 3.2 Higher Education and Income Inequality -- 3.3 Income Inequality and Growth -- 3.4 Credit Constraints in Higher Education -- Chapter 4: Screening and Economic Growth -- 4.1 Better Screening in a Dynamic Framework -- 4.2 Description of the Framework -- 4.3 Screening in the Absence of Risk Sharing -- 4.4 Screening in the Presence of Risk Sharing -- 4.5 Concluding Remarks -- Appendix to Chapter 4 -- Chapter 5: Higher Education Financing. 5.1 Basic Framework with Multiple Funding Schemes -- 5.1.1 Regime I: Unrestricted Access to Credit Markets -- 5.1.2 Regime II: Unrestricted Insurance of Loans -- 5.1.3 Regime III: Restricted Insurance of Loans -- 5.1.4 Remarks on the Implementation of the Regimes -- 5.2 Human Capital Accumulation -- 5.3 Welfare Comparison -- 5.4 The Effect of Better Screening -- 5.4.1 Screening and Human Capital Formation -- 5.4.2 Screening and Welfare -- Appendix to Chapter 5 -- Chapter 6: The Role of Government in Financing Higher Education -- 6.1 Subsidizing Tuition Versus Subsidizing Student Loans -- 6.1.1 The Model -- 6.1.1.1 The Social Investment Optimum -- 6.1.1.2 Individual Behavior and Equilibrium -- 6.1.2 Exogenous Subsidization Policies -- 6.1.2.1 Subsidizing Student Loans (SL-Subsidy) -- 6.1.2.2 Subsidizing Tuition Fees (T-Subsidy) -- 6.1.2.3 Comparing the Subsidization Policies -- 6.1.3 Endogenous Subsidization Policies -- 6.1.4 Tax-Deductible Investment -- 6.1.5 Policy Implications -- 6.2 Should Diverse Funding Schemes Coexist in Higher Education? -- 6.2.1 The Model -- Funding Structure and Individual Behavior -- 6.2.1.1 Credit Funding Equilibrium (CRE) -- 6.2.1.2 Equilibrium with Funding Diversity (FDE) -- 6.2.2 Funding Structure and Social Welfare -- 6.2.3 Access Restriction to Higher Education -- 6.2.3.1 Restricted Participation FDE (RP/FDE) -- 6.2.3.2 Restricted Participation and Social Welfare -- 6.2.4 A Generalization -- 6.2.5 Policy Implications and Conclusion -- Appendix to Chapter 6 -- Chapter 7: Screening and Income Inequality -- 7.1 Inequality of Income Opportunities -- 7.1.1 Theoretical Framework -- 7.1.2 Screening and Inequality Without Risk Sharing -- 7.1.3 Screening and Inequality with Risk Sharing -- 7.2 Inequality of Income Distribution -- 7.2.1 The Framework and Assumptions -- 7.2.2 Formation of Human Capital and Income Inequality. 7.2.3 The Case of CEIS Preferences -- 7.2.4 Discussion and Policy Implications -- Appendix to Chapter 7 -- Bibliography -- Index.
The Economics of Screening and Risk Sharing in Higher Education explores advances in information technologies and in statistical and social sciences that have significantly improved the reliability of techniques for screening large populations. These advances are important for higher education worldwide because they affect many of the mechanisms commonly used for rationing the available supply of educational services. Using a single framework to study several independent questions, the authors provide a comprehensive theory in an empirically-driven field. Their answers to questions about funding structures for investments in higher education, students' attitudes towards risk, and the availability of arrangements for sharing individual talent risks are important for understanding the theoretical underpinnings of information and uncertainty on human capital formation. Investigates conditions under which better screening leads to desirable outcomes such as higher human capital accumulation, less income inequality, and higher economic well-being. Questions how the role of screening relates to the funding structure for investments in higher education and to the availability of risk sharing arrangements for individual talent risks. Reveals government policies that are suited for controlling or counteracting detrimental side effects along the growth path.