Question: In our model of educational attainment, the individual chooses the level of schooling that maximizes the net present value of their future earnings.
a. What are the two factors that contribute to the level of education?
b. Using the simplified model we presented in class where the individual chooses to be either a high school graduate or college graduate, what would you predict about the educational attainment of those who pay for college without student loans compared to those who must finance their college education, and why?