000			01463nam a22001577a 4500
999			_c527839 _d527839
008			240927b ||||| |||| 00| 0 eng d
100			_aHerbst, Daniel and Hendren, Nathaniel _958666
245			_aOpportunity unraveled: Private information and the missing markets for financing human capital
260			_aThe American Economic Review
300			_a114(7), Jul, 2024: p.2024-2072
520			_aWe examine whether adverse selection has unraveled private markets for equity and state-contingent debt contracts for financing higher education. Using survey data on beliefs, we show a typical college-goer would have to repay $1.64 in present value for every $1 of financing to overcome adverse selection in an equity market. We find that risk-averse college-goers are not willing to accept these terms, so markets unravel. We discuss why moral hazard, biased beliefs, and outside credit options are less likely to explain the absence of these markets. We quantify the welfare gains for subsidizing equity-like contracts that mitigate college-going risks.- Reproduced https://www.aeaweb.org/articles?id=10.1257/aer.20211653
650			_aEconomics, Higher Education Financing, Adverse Selection, Equity Contracts, State-Contingent Debt, Risk Aversion, Moral Hazard, Biased Beliefs, Credit Options, Welfare Gains, Subsidies, Behavioral Economics, Education Finance _958667
773			_aThe American Economic Review
906			_aECONOMICS
942			_cAR