Higher Education Policy, Graduate Taxes and Wealth Distribution
Tesis, Magíster en Economía, IE-PUC, 2017
Abstract: This thesis intends to shed light on the possible effects of higher education policy reforms on the distribution of wealth, specifically the implementation of free higher education, replacing tuition fees. A novel alternative for financing the reform is examined: a tax on the labor income of higher education graduates. The analysis is based on a quantitative OLG life cycle model, with heterogeneous agents, intergenerational links, incomplete financial markets, endogenous education decision,
and general equilibrium in the determination of wages. The results indicate a slight decrease in wealth inequality, explained by an increase in enrollment, graduation and a smaller earnings premium for higher education.