eprintid: 10089197 rev_number: 19 eprint_status: archive userid: 608 dir: disk0/10/08/91/97 datestamp: 2020-01-09 12:10:36 lastmod: 2021-11-23 23:44:13 status_changed: 2020-01-09 12:10:36 type: article metadata_visibility: show creators_name: Abbott, B creators_name: Gallipoli, G creators_name: Meghir, C creators_name: Violante, GL title: Education Policy and Intergenerational Transfers in Equilibrium ispublished: pub divisions: UCL divisions: B03 divisions: C03 divisions: F24 note: This version is the version of record. For information on re-use, please refer to the publisher’s terms and conditions. abstract: We examine the equilibrium effects of college financial aid policies building an overlapping-generations life cycle model with education, labor supply, and saving decisions. Cognitive and noncognitive skills of children depend on parental education and skills and affect education and labor market outcomes. Education is funded by parental transfers that supplement grants, loans, and student labor supply. Crowding out of parental transfers by government programs is sizable and cannot be ignored. The current system of federal aid improves long-run welfare by 6 percent. More generous ability-tested grants would increase welfare and dominate both an expansion of student loans and a labor tax cut. date: 2019-12 date_type: published publisher: UNIV CHICAGO PRESS official_url: https://doi.org/10.1086/702241 oa_status: green full_text_type: pub language: eng primo: open primo_central: open_green verified: verified_manual elements_id: 1738010 doi: 10.1086/702241 lyricists_name: Meghir, Constantine lyricists_id: CHDME77 actors_name: Flynn, Bernadette actors_id: BFFLY94 actors_role: owner full_text_status: public publication: Journal of Political Economy volume: 127 number: 6 pagerange: 2569-2624 pages: 56 citation: Abbott, B; Gallipoli, G; Meghir, C; Violante, GL; (2019) Education Policy and Intergenerational Transfers in Equilibrium. Journal of Political Economy , 127 (6) pp. 2569-2624. 10.1086/702241 <https://doi.org/10.1086/702241>. Green open access document_url: https://discovery.ucl.ac.uk/id/eprint/10089197/1/702241.pdf