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A Securitised Market For Human Capital

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  • Wei‐Choun Yu
  • Donald M. Salyards

Abstract

This paper proposes a simple finance innovation with an income‐contingent repayment system to supplement our current fixed‐interest rate student loan system. Income‐contingent repayments could be pooled and securitised while lenders could sell these lifetime equity‐like human capital securities to investors who seek to diversify their existing portfolios. Without increasing the government's fiscal burden, this innovation would significantly reduce entry barriers facing finance‐constrained college students in a continually rising cost environment.

Suggested Citation

  • Wei‐Choun Yu & Donald M. Salyards, 2008. "A Securitised Market For Human Capital," Economic Affairs, Wiley Blackwell, vol. 28(3), pages 50-56, September.
    • Handle: RePEc:bla:ecaffa:v:28:y:2008:i:3:p:50-56
    DOI: 10.1111/j.1468-0270.2008.00845.x
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