IE. Kandel, D. Hunter, and R. Wermers dedicate this paper to the memory of our valued friend and colleague, Shmuel Kandel, who inspired us and contributed mightily to this project. Corresponding author: R. Wermers, [email protected] (email), 301-405-0572 (tel), 301-405-0359 (fax). We gratefully acknowledge useful comments from an anonymous referee, and suggestions from the participants of the Ger...

A targeted educational voucher scheme [TEVS] is often proposed for the poor in developing countries. Essentially, a TEVS involves a voucher or certificate by which poor households are given the ability to pay tuition and fees for their children’s schooling at participating non-public schools. However, little is known about TEVS design in developing countries. By exploring the details of TEVS de...

We formulate an optimal stopping problem where the probability scale is distorted by a general nonlinear function. The problem is inherently time inconsistent due to the Choquet integration involved. We develop a new approach, based on a reformulation of the problem where one optimally chooses the probability distribution or quantile function of the stopped state. An optimal stopping time can t...

A burgeoning literature finds that financial development exerts a first-order impact on long-run economic growth. Levine and Zervos (1998) show that banking and stock market development are good predictors of economic growth.1 At the microeconomic level, Demirguc-Kunt and Maksimovic (1998) and Rajan and Zingales (1998) find that financial institutions are crucial for firm and industrial expansi...

Despite a large literature examining the effect of litigation on education finance, student achievement and community outcomes, relatively little attention has been paid to the effect of this litigation on teachers’ compensation. This is especially puzzling given the role that teachers unions play in supporting, and sometimes originating finance lawsuits. In fact, union support for finance laws...

Do material interests shape a person’s views on immigration? If so, how? In a widely cited study, Gordon Hanson, Kenneth Scheve, and Matthew J. Slaughter contend that the public finance environment of each U.S. state affects the way an individual’s skill level influences her or his support for immigration. Jens Hainmueller and Michael J. Hiscox disagree with the public finance argument and have...

For the last two decades, the state has provided assistance to unemployed people wishing to enter self-employment. The emphasis of assistance has been on advice and training. Financial support has tended to be highly restricted. Yet research has indicated that low initial financing may contribute to business failure and that unemployed people face barriers to accessing commercial loans. The aim...

We propose that, by financing their own product sales through captive finance subsidiaries, durable goods manufacturers commit to higher resale values for their products in future periods. Using data on captive financing by the manufacturers of heavy equipment, we find that captive backed models have lower price depreciation. The evidence is consistent with captive finance helping manufacturers...