Department of Economics and Finance
Name: Oliko Vardishvili
From: University of California, Irvine
Title: The Macroeconomic Cost of College Dropouts
Abstract:
More than 40% of US college students drop out without gaining a degree. This paper investigates whether dropouts are largely due to academic ability or financial constraints. I provide empirical evidence that the probability of dropout is strongly associated with both ability and finances--even after controlling for other factors. I build a quantitative general-equilibrium overlapping generations model, where individuals face incomplete information on their academic ability and uncertainty about the generosity of financial aid. The model simulations show that uncertainty regarding ability is responsible for 10% of the observed dropout rates, while uncertainty regarding financial aid explains up to 43%. Pursuing a policy that eliminates uncertainty about the college aid would increase social welfare by as much as 1.8%, benefiting both college graduates and non-college graduates. Such a policy is largely self-financing due to endogenous improvements in skill allocation and associated growth in GDP.
Events and seminars by UiS Business School
Centre for Innovation Research Seminar: Where lies the future after the end of banking secrecy? Geographies of entrepreneurial storytelling and alternative future-making in Switzerland
Thu. 04.04.2024
12:00-13:00
Centre for Innovation Research Seminar: Changes in Technology Acceptance-Resistance Patterns – Exploring Triggers and Implications Using Latent Transition Analysis
Thu. 11.04.2024
12:00-13:00
Centre for Innovation Research Seminar: Circular Business model experimentation – A business experiment lab approach
Thu. 18.04.2024
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UiS School of Business and Law Seminar: The Amazon Forest Fire – Export-Induced Deforestation
Wed. 08.05.2024
12:15-13:15
UiS School of Business and Law Seminar: Explicit Gender Discrimination
Wed. 22.05.2024
12:15-13:15
UiS School of Business and Law Seminar: The creation and diffusion of knowledge – Evidence from the jet age
Wed. 29.05.2024
12:15-13:15