Volume 15, Number 4 (Fall) 1980
Weiss, Yoram, Arden Hall, and Fred Dong. 1980. "The Effect of Price and Income on Investment in Schooling." Journal of Human Resources 15(4):611-640.
This paper investigates the impact of a negative income tax and a program of schooling subsidies on the demand for schooling of adult heads of families. A two-year period model of labor supply is developed in which schooling in incorporated. An empirical version of the model is estimated using data from the first three years of the Seattle and Denver Income Maintenance Experiments. Strong effects of the schooling subsidies were found, but net effects of the negative income tax on schooling were not significant. The magnitude of the schooling subsidy effects implies a substantial positive social rate of return to schooling subsidies.
Weiss is Professor of Economics at Tel-Aviv University. Hall and Dong are economists with SRI International. The research reported herein was performed pursuant to contracts with the States of Washington and Colorado, prime contractors for the Department of Health, Education, and Welfare under contract numbers SRS-70-53 and HEW-100-78-0004. The opinions expressed in the paper are those of the authors and should not be construed as representing the opinions or policies of the States of Washington or Colorado or any agency of the Untied States government. The authors wish to thank Katherine Dickinson for helpful comments.
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