This paper extends Becker's basic model on investment in human capital by introducing effort as a decision variable. Based on this extended model we consider the efficiency of two popular study-grant schemes and propose a third which unequivocally increases the student's effort and may thereby...

Rich countries often face sizeable illegal migration. This paper suggests that these countries would use the financial aid which they give to the source countries as an instrument to prevent illegal immigration. The core of this policy is to allow the source countries to compete for the...