IDEAS home Printed from https://ideas.repec.org/p/hal/wpaper/hal-00369986.html
   My bibliography  Save this paper

How Income Contingent Loans could affect Return to Higher Education: a microsimulation of the French Case

Author

Listed:
  • Pierre Courtioux

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

The paper assesses the implementation of income contingent loan schemes for higher education (ICL) in an institutional context characterized by two main features: (i) a former tuition free system and (ii) a great heterogeneity in tertiary education's diplomas quality and cost, which impacts the individual career paths. In this particular case, ICL implementation leads to a trade-off between increasing ‘career' equity in terms of collective public spending versus individual gains and widening low education traps by reducing the economic incentives to pursue a tertiary education curriculum. Based on a dynamic microsimulation model we propose an ex ante evaluation of the enlargement of low education traps induced by the implementation of different ICL designs in France. We conclude that the risk of low education traps' enlargement remains very small.

Suggested Citation

  • Pierre Courtioux, 2008. "How Income Contingent Loans could affect Return to Higher Education: a microsimulation of the French Case," Working Papers hal-00369986, HAL.
    • Handle: RePEc:hal:wpaper:hal-00369986
    Note: View the original document on HAL open archive server: https://hal.science/hal-00369986
    as

    References listed on IDEAS

    as
    1. Bas Jacobs, 2002. "An investigation of education finance reform; graduate taxes and income contingent loans in the Netherlands," CPB Discussion Paper 9.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    2. Chapman, Bruce, 1997. "Conceptual Issues and the Australian Experience with Income Contingent Charges for Higher Education," Economic Journal, Royal Economic Society, vol. 107(442), pages 738-751, May.
    3. Heckman, James J. & Lochner, Lance J. & Todd, Petra E., 2006. "Earnings Functions, Rates of Return and Treatment Effects: The Mincer Equation and Beyond," Handbook of the Economics of Education, in: Erik Hanushek & F. Welch (ed.), Handbook of the Economics of Education, edition 1, volume 1, chapter 7, pages 307-458, Elsevier.
    4. N/A, 2005. "The World Economy," National Institute Economic Review, National Institute of Economic and Social Research, vol. 191(1), pages 8-30, January.
    5. Bruce Chapman & Chris Ryan, 2002. "Income-Contingent Financing of Student Charges for Higher Education: Assessing the Australian Innovation," CEPR Discussion Papers 449, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    6. Mitton,Lavinia & Sutherland,Holly & Weeks,Melvyn (ed.), 2000. "Microsimulation Modelling for Policy Analysis," Cambridge Books, Cambridge University Press, number 9780521790062, September.
    7. V. Vandenberghe & O. Debande, 2007. "Deferred and Income-contingent Tuition Fees: An Empirical Assessment using Belgian, German and UK Data," Education Economics, Taylor & Francis Journals, vol. 15(4), pages 421-440.
    8. Bas Jacobs, 2002. "An investigation of education finance reform; graduate taxes and income contingent loans in the Netherlands," CPB Discussion Paper 9, CPB Netherlands Bureau for Economic Policy Analysis.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Pierre Courtioux & Stéphane Gregoir & Dede Houeto, 2009. "The Simulation of the Educational Output over the Life Course: The GAMEO Model," Post-Print hal-00391393, HAL.
    2. Courtioux, Pierre & Gregoir, Stéphane & Houeto, Dede, 2014. "Modelling the distribution of returns on higher education: A microsimulation approach," Economic Modelling, Elsevier, vol. 38(C), pages 328-340.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rita Asplund & Oussama Ben Adbelkarim & Ali Skalli, 2008. "An equity perspective on access to, enrolment in and finance of tertiary education," Education Economics, Taylor & Francis Journals, vol. 16(3), pages 261-274.
    2. Darragh Flannery & Cathal O’Donoghue, 2011. "The Life-cycle Impact of Alternative Higher Education Finance Systems in Ireland," The Economic and Social Review, Economic and Social Studies, vol. 42(3), pages 237-270.
    3. repec:got:cegedp:137 is not listed on IDEAS
    4. Schwager, Robert, 2012. "Student loans in a tiebout model of higher education," University of Göttingen Working Papers in Economics 137, University of Goettingen, Department of Economics.
    5. Bas Jacobs & Sweder J. G. van Wijnbergen, 2007. "Capital-Market Failure, Adverse Selection, and Equity Financing of Higher Education," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 63(1), pages 1-32, March.
    6. Vandenberghe, Vincent & Debande, Olivier, 2008. "Refinancing Europe's higher education through deferred and income-contingent fees: An empirical assessmentusing Belgian, German & UK data," European Journal of Political Economy, Elsevier, vol. 24(2), pages 364-386, June.
    7. O Debande & Vincent Vandenberghe, 2007. "Refinancing Europe’s Higher Education through Deferred and Income-Contingent Fees: An empirical assessment using Belgian, German and UK data," CASE Papers case124, Centre for Analysis of Social Exclusion, LSE.
    8. Vandenberghe, Vincent & Debande, O., 2007. "Refinancing Europe’s higher education through deferred and income-contingent fees: an empirical assessment using Belgian, German and UK data," LSE Research Online Documents on Economics 6211, London School of Economics and Political Science, LSE Library.
    9. repec:cep:sticas:/124 is not listed on IDEAS
    10. Vincent, VANDENBERGHE, 2005. "Free Higher Education - Regressive Transfer or Implicit Loan ?," Discussion Papers (ECON - Département des Sciences Economiques) 2005031, Université catholique de Louvain, Département des Sciences Economiques.
    11. Migali, Giuseppe, 2012. "Funding higher education and wage uncertainty: Income contingent loan versus mortgage loan," Economics of Education Review, Elsevier, vol. 31(6), pages 871-889.
    12. Dirk Schindler & Benjamin Weigert, 2008. "Insuring Educational Risk: Opportunities versus Income," CESifo Working Paper Series 2348, CESifo.
    13. Bruce Chapman, 2008. "The Australian University Student Financing System : The Rationale for, and Experience with, Income Contingent Loans," EABER Working Papers 21944, East Asian Bureau of Economic Research.
    14. Chapman, Bruce & Ryan, Chris, 2005. "The access implications of income-contingent charges for higher education: lessons from Australia," Economics of Education Review, Elsevier, vol. 24(5), pages 491-512, October.
    15. Gillian Beer & Bruce Chapman, 2004. "HECS System Changes: Impact on Students," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 11(2), pages 157-174.
    16. Dirk Schindler & Benjamin Weigert, 2008. "Educational and Wage Risk: Social Insurance vs. Quality of Education," CESifo Working Paper Series 2513, CESifo.
    17. Bruce Chapman & Mark Rodrigues & Chris Ryan, 2007. "HECS for TAFE: The case for extending income contingent loans," Treasury Working Papers 2007-02, The Treasury, Australian Government, revised Apr 2007.
    18. Vincent, VANDENBERGHE & Olivier, DEBANDE, 2005. "Paying after Graduation. An Empirical assessment of loans wit Income Forgiveness and Human Capital Contracts," Discussion Papers (ECON - Département des Sciences Economiques) 2005003, Université catholique de Louvain, Département des Sciences Economiques.
    19. Vincent, VANDENBERGHE & Olivier, DEBANDE, 2004. "Financing Higher Education with Students Loans - The crucial role of income-contingency and risk pooling," LIDAM Discussion Papers IRES 2004036, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    20. Felipe Andrés Lozano-Rojas, 2012. "Human Capital Contracts in Chile: An Exercise Based on Income Data on chilean HE Graduates," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 49(2), pages 185-215, November.
    21. Bruce Chapman, 2007. "Higher Education Financing in Australia," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 5(2), pages 55-61, 07.
    22. V. Vandenberghe & O. Debande, 2007. "Deferred and Income-contingent Tuition Fees: An Empirical Assessment using Belgian, German and UK Data," Education Economics, Taylor & Francis Journals, vol. 15(4), pages 421-440.

    More about this item

    Keywords

    Higher education; microsimulation; ICL;
    All these keywords.

    JEL classification:

    • I2 - Health, Education, and Welfare - - Education
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:wpaper:hal-00369986. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.