Replication data for: Liquidity Constraints, Fiscal Externalities, and Optimal Tuition Subsidies

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Lawson_AEJPol-2015-0079_Data			10/13/2019 04:04:AM
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Project Citation:

Lawson, Nicholas. Replication data for: Liquidity Constraints, Fiscal Externalities, and Optimal Tuition Subsidies. Nashville, TN: American Economic Association [publisher], 2017. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-13. https://doi.org/10.3886/E114633V1

Project Description

Summary: A large literature focuses on two important rationales for government subsidies to college students: positive fiscal externalities from a larger tax base, and liquidity constraints. This paper provides a first attempt to gauge the relative importance of these mechanisms. I use US data in combination with two modeling approaches: calibration of a simple structural model of human capital accumulation, and a "sufficient statistics" approach. The resulting optimal subsidies are larger than median public tuition by about $3,000 per year. This finding is driven by fiscal externalities; optimal tuition subsidy policy is not sensitive to the extent of liquidity constraints.

Scope of Project

JEL Classification:
      H52 National Government Expenditures and Education
      H75 State and Local Government: Health; Education; Welfare; Public Pensions
      I22 Educational Finance; Financial Aid
      I23 Higher Education; Research Institutions
      I28 Education: Government Policy

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V1 [2019-10-13]

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