Investing in Human Capital: A Capital Markets Approach to Student Funding

by Miguel Palacios Lleras , Foreword by Nicholas Barr

• ISBN13: 9780521828406
• ISBN10: 0521828406
• Format: Hardcover
• Copyright: 2004-04-05
• Publisher: Cambridge University Press

Summary

Most higher education finance literature assumes that students cannot pledge their future earnings to finance their education in a free society. Investing in Human Capital challenges that assumption and explores human capital contracts as an alternative mechanism for financing higher education. Investing in Human Capital tracks the roots of the idea behind human capital contracts, discusses the beneficial consequences they would have on students and on higher education markets, and describes how they can develop in light of the innovations that have taken place in financial markets during the last decades. The book also explores the challenges - ethical and financial - that such instruments face and offers implementation alternatives that can bring about their existence in the context of a national higher education financing programme.

Table of Contents

Foreword by Nicholas Barr

Introduction

Part I. The Problem of Financing Education: 1. The value of education

2. Market failures in financing of education

3. The need for alternatives to traditional funding

Part II. Equity-like Investments to Finance Education: 4. The evolution of human capital contracts

5. How human capital contracts work

6. The case for human capital contracts

7. Human capital options

Part III. Implementing Human Capital Contracts: 8. Hurdles in the implementation of human capital contracts

9. Lessons from the implementation of income-contingent loans

10. Government driven implementation of human capital contracts

11. Conclusion

Appendixes A, B, C, D.