School Loans, Subsidies, and Economic Growth

Author: Akira Yakita

Source: FinanzArchiv: Public Finance Analysis, Volume 60, Number 2, 1 July 2004 , pp. 262-276(15)

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Abstract:

This paper examines the effects of government educational subsidies on economic growth and welfare. In an overlapping-generations model with human-capital accumulation, it is shown that, even when human-capital externalities are large, an increase in government subsidies to private-education debt may have a negative effect on the long-run economic growth rate through the general-equilibrium effects of factor-price changes, thereby making future generations worse off. We also show that subsidy policy does not necessarily result in a Pareto improvement even when there are positive effects on growth.

Keywords: STUDENT FINANCIAL AID; HUMAN CAPITAL; ECONOMIC GROWTH

Document Type: Research article

DOI: http://dx.doi.org/10.1628/0015221041525778

Publication date: 2004-07-01

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FinanzArchiv founded in 1884 is one of the world's oldest professional journals in public finance.

FinanzArchiv publishes original work from all fields of public economics which are of interest to an international readership, e.g. taxation, public debt, public goods, public choice, federalism, market failure, social policy, and the welfare state. Special emphasis is on high-quality theoretical and empirical papers on current policy issues.

FinanzArchiv is a well-established, internationally oriented journal in the field of public economics, widely read in Europe and all over the world.

FinanzArchiv is listed in the Social Science Citation Index (SSCI, JCR impact factor 2007 0,296), in Current Contents/Social and Behavioral Sciences, in IDEAS and RePEc (IDEAS/RePEc simple impact factor 2008 1.177), in the Journal of Economic Literature (CD and online), and in the International Bibliography of the Social Sciences.

FinanzArchiv is a fully peer-reviewed journal committed to a prompt turnaround of submissions. No more than four months should pass between online submission of a manuscript and the editor's decision on acceptance, revision, or rejection.
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School Loans, Subsidies, and Economic Growth

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