2026-04-19T17:49:47Zhttps://recercat.cat/oai/request

oai:recercat.cat:10230/8992025-12-18T01:49:40Zcom_2072_6col_2072_452953

00925njm 22002777a 4500 dc Hendel, Igal author Shapiro, Joel author Willen, Paul author 2020-05-25T09:27:09Z 2020-05-25T09:27:09Z 2001-05-01 2020-05-25T09:19:05Z Since World War II, the United States government has made improved access to higher education a priority. This e¤ort has substantially increased the number of people who complete college. We show that by reducing the effective interest rate on borrowing for education, such policies can actually increase the gap in wages between those with a college education and those without. The mechanism that drives our results is the signaling role of education first explored by Spence (1973). We argue that financial constraints on education reduce the value of education as a signal. We solve for the reduced form relationship between the interest rate and the wage premium in the steady state of a dynamic asymmetric information model. In addition, we discuss evidence of decreases in borrowing costs for education financing in the U.S. college loans education signalling college wage premium Microeconomics Educational opportunity and the college premium