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Title: Incentive Effects of Social Policies on Education and Labor Markets
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Sahin, Aysegul |
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Incentive Effects of Social Policies on Education and Labor Markets Ph.D. Dissertation, The University of Rochester, 2002. DAI-A 63/03, p. 1051, Sep 2002 Cohort(s): NLSY79 Publisher: UMI - University Microfilms, Bell and Howell Information and Learning Keyword(s): College Enrollment; Higher Education; Modeling, Mixed Effects; Tuition; Unemployment; Unemployment Insurance; Welfare A social policy might have disincentive effects on its beneficiaries in the presence of asymmetric information, This dissertation studies the incentive issues arising from the implementation of certain educational and labor market policies when informational asymmetry is present, In particular, the first chapter deals with higher education subsidies and the second chapter studies unemployment insurance. Chapter 1 analyzes the potential disincentive effects of higher education subsidies on students' performance, A game-theoretical model is employed to analyze the interaction between parents and their child prior to and during the college education, The model is calibrated by using information from the High School and Beyond Sophomore Cohort: 1980-92 and the National Longitudinal Survey of Youth 1979 data sets, The experiments show that subsidizing tuition increases enrollment rates and graduation rates. Yet, there are two effects lowering student effort, First a low-tuition, high-subsidy strategy causes an increase in the ratio of less able and less highly-motivated students among college graduates. Secondly, all students, even the more highly-motivated ones, respond to lower tuition levels by decreasing their effort levels. Chapter 2 employs a dynamic general equilibrium model to design and evaluate long-term unemployment insurance plans (plans that depend on workers' unemployment history) in economies with and without hidden savings. The simulations show that optimal benefit schemes and welfare implications differ considerably when hidden savings are considered. First of all, the optimal benefit path is not necessarily declining, Secondly, the role of history dependence of unemployment insurance plans is not as important quantitatively as the earlier studies suggest: welfare gains are much lower when hidden savings are considered. Given these results, as well as the fact that long-term unemployment insurance plans are hard to administer in practice, switching to long-term plans may not be a desirable policy. |
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Bibliography Citation
Sahin, Aysegul. Incentive Effects of Social Policies on Education and Labor Markets. Ph.D. Dissertation, The University of Rochester, 2002. DAI-A 63/03, p. 1051, Sep 2002. |