This paper investigates the impact of borrowing constraints on human capital accumulation and welfare. In a standard overlapping-generations model where parental altruism results in transfers that children allocate to consumption and education, the average level of welfare is higher when...

The “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005†makes extensive changes to U.S. consumer bankruptcy regulations. One of its most important features is to prohibit debtors from filing under Chapter 7 when some or all of a debtor’s unsecured liability can be...