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Romano, Richard ; Tampieri, Alessandro
(2013)
Arts vs Engineering: The Choice among Consumption and Investment in Education.
Bologna:
Dipartimento di Scienze economiche DSE,
p. 17.
DOI 10.6092/unibo/amsacta/3726.
In: Quaderni - Working Paper DSE
(892).
ISSN 2282-6483.
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Abstract
In this paper we develop a model in which students choose their university courses according to both investment and consumption incentives. We show that in the private problem, the education decisions are inefficient compared to the social optimum. The result is driven by the fact that students do not consider an externality of acquiring education for investment purposes in the working environment. We show that it is possible to design tuition fees in such a way that students acquire the socially optimal level of education.
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