Details

Related name

• National Bureau of Economic Research [Browse]
• Gallipoli, Giovanni [Browse]
• Meghir, Costas [Browse]
• Violante, Giovanni L. [Browse]

Series

• Working Paper Series (National Bureau of Economic Research) no. w18782. [More in this series]
• NBER working paper series no. w18782

Summary note

We examine the equilibrium effects of college financial aid policies building an overlapping generations life cycle model with education, labor supply, and saving decisions. Cognitive and non-cognitive skills of children depend on parental education and skills, and affect education and labor market outcomes. Education is funded by parental transfers that supplement grants, loans and student labor supply. Crowding out of parental transfers by government programs is sizable and cannot be ignored. The current system of federal aid improves long-run welfare by 6%. More generous ability-tested grants would increase welfare and dominate both an expansion of student loans and a labor tax cut.

Notes

February 2013.

Source of description

Print version record

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