Easy Come Easy Go: The Influence of Financial Aid on the Age-Earnings Relationship

Abstract

Our study suggests that moral hazard has negative effects on the income of individuals who receive educational assistance. Based on empirical analyses of the Census Bureau's survey of Income and Program Participation, we found that the relationship between age and income is non-linear and that this relationship is mediated by education and moderated by the form of the financial aid received. The study concludes with policy implications and recommendations made for managers, regulators and individuals who receive educational assistance.