| 来源类型 | Working Paper |
| 规范类型 | 报告 |
| DOI | 10.3386/w29214 |
| 来源ID | Working Paper 29214 |
| Opportunity Unraveled: Private Information and the Missing Markets for Financing Human Capital | |
| Daniel Herbst; Nathaniel Hendren | |
| 发表日期 | 2021-09-06 |
| 出版年 | 2021 |
| 语种 | 英语 |
| 摘要 | Investing in college carries high returns but comes with considerable risk. Financial products like equity contracts can mitigate this risk, yet college is typically financed through non-dischargeable, government-backed student loans. This paper argues that adverse selection has unraveled private markets for college-financing contracts that mitigate risk. We use survey data on students’ expected post-college outcomes to estimate their knowledge about future outcomes and quantify the threat of adverse selection in markets for equity contracts and several state-contingent debt contracts. We find students hold significant private knowledge of their future earnings, academic persistence, employment, and loan repayment likelihood, beyond what is captured by observable characteristics. Our empirical results imply that a typical college-goer must expect to pay back $1.64 in present value for every $1 of equity financing to cover the financier’s costs of covering those who would adversely select their contract. We estimate that college-goers are not willing to accept these terms so that private markets unravel. Nonetheless, our framework quantifies significant welfare gains from government subsidies that would open up these missing markets and partially insure college-going risks. |
| 主题 | Public Economics ; Health, Education, and Welfare ; Education |
| URL | https://www.nber.org/papers/w29214 |
| 来源智库 | National Bureau of Economic Research (United States) |
| 引用统计 | |
| 资源类型 | 智库出版物 |
| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/586887 |
| 推荐引用方式 GB/T 7714 | Daniel Herbst,Nathaniel Hendren. Opportunity Unraveled: Private Information and the Missing Markets for Financing Human Capital. 2021. |
| 条目包含的文件 | ||||||
| 文件名称/大小 | 资源类型 | 版本类型 | 开放类型 | 使用许可 | ||
| w29214.pdf（1327KB） | 智库出版物 | 限制开放 | CC BY-NC-SA | 浏览 | ||
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