Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/26558
Authors: 
Schindler, Dirk
Weigert, Benjamin
Year of Publication: 
2008
Series/Report no.: 
CESifo working paper 2513
Abstract: 
In this model of education, where individuals are exposed both to educational risk and to wage risk within the skilled sector, successful graduation depends both on individual effort to study and on public resources. We show that insuring the present risks is a dichotomic task: Wage risk is diversified ex post among the skilled by graduate taxation and skill-specific tuition fees. Educational risk of failure and inequality between skilled and unskilled workers are mitigated ex ante by enhancing the quality of education. The necessary expenditures are optimally financed by regressive tuition fees and the net revenue from the graduate tax.
Subjects: 
Human capital investment
educational risk
wage risk
learning effort
graduate taxation
regressive tuition fees
JEL: 
H21
I2
J2
Document Type: 
Working Paper

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