Skip to main content

Income Contingent Loans as a General Risk Management Instrument

  • Chapter
  • 852 Accesses

Part of the International Economic Association Series book series (IEA)

Abstract

The apparent success of income contingent loans (ICL) in higher education financing has been associated with a plethora of studies examining the prospects for ICL in many other areas of social and economic policy.1 This paper gives brief consideration to several of these studies in order to illustrate the disparate nature of possibilities and to help set the scene for the development of a broad ICL theoretical framework.

Keywords

  • Moral Hazard
  • Adverse Selection
  • Australian Journal
  • Parental Leave
  • Expected Utility Theory

These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

This paper draws on Bruce Chapman (2014), ‘Income Contingent Loans: Background’, in Bruce Chapman, Timothy Higgins and Joseph E. Stiglitz (eds), Income Contingent Loans: Theory, Practice and Prospects, Basingstoke and New York: Palgrave Macmillan.

The author acknowledges the financial contribution of Dhurakij Pundit University and the Australian Research Council. Kiatanantha Lounkaew, Timothy Higgins, John Quiggin and Joseph Stiglitz offered constructive inputs. The author is responsible for all errors and omissions.

This is a preview of subscription content, access via your institution.

Buying options

Chapter
USD   29.95
Price excludes VAT (USA)
  • DOI: 10.1057/9781137529718_8
  • Chapter length: 8 pages
  • Instant PDF download
  • Readable on all devices
  • Own it forever
  • Exclusive offer for individuals only
  • Tax calculation will be finalised during checkout
eBook
USD   34.99
Price excludes VAT (USA)
  • ISBN: 978-1-137-52971-8
  • Instant PDF download
  • Readable on all devices
  • Own it forever
  • Exclusive offer for individuals only
  • Tax calculation will be finalised during checkout
Softcover Book
USD   45.00
Price excludes VAT (USA)
Hardcover Book
USD   149.99
Price excludes VAT (USA)

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  • Australian Journal of Labour Economics (2009) special issue, vol. 12, no. 2 (September).

    Google Scholar 

  • Barr, N. (2001) Government as Piggy-Bank, Cambridge: Cambridge University Press.

    Google Scholar 

  • Bhagwati, J.N. (ed.) (1976) The Brain Drain and Taxation, vol. 2: Theory and Empirical Analysis, Amsterdam: North-Holland.

    Google Scholar 

  • Chapman, B. (2006) Government Managing Risk: Income Contingent Loans for Social and Economic Progress, London and New York: Routledge, Taylor & Francis Group.

    Google Scholar 

  • Chapman, B. and L. Botterill (2004) “An Income-Related Loans Proposal for Drought Relief for Farm Businesses,” Australian Journal of Public Administration, vol. 63, no. 3, pp. 10–19.

    CrossRef  Google Scholar 

  • Chapman, B. and L. Botterill (2006) “Turning Grants into Loans: Income Contingent Loans for Drought Relief,” in B. Chapman (ed.), Government Managing Risk: Income Contingent Loans for Social and Economic Progress, London and New York: Routledge, Taylor & Francis Group, pp. 122–39.

    Google Scholar 

  • Chapman, B. and L. Botterill (2009) “A Revenue Contingent Loan Instrument for Agricultural Credit with Particular Reference to Drought Relief,” Australian Journal of Labour Economics, vol. 12, no. 2, pp. 181–96.

    Google Scholar 

  • Chapman, B. and R. Denniss (2005) “Using Financial Incentives and Income Contingent Penalties to Detect and Punish Collusion and Insider Trading,” Australian and New Zealand Journal of Criminology, vol. 38, no. 1, pp. 122–40.

    CrossRef  Google Scholar 

  • Chapman, B., A. Freiberg, J. Quiggin and D. Tait (2004) “Using the Tax System to Collect Fines,” Australian Journal of Public Administration, vol. 63, no. 3, pp. 20–32.

    CrossRef  Google Scholar 

  • Chapman, B. and T. Higgins (2009) “An Income Contingent Loan for Extending Paid Parental Leave,” Australian Journal of Labour Economics, vol. 12, no. 2, pp. 197–216.

    Google Scholar 

  • Chapman, B., T. Higgins and J. E. Stiglitz (eds) (2014) Income Contingent Loans: Theory, Practice and Prospects, New York: Palgrave Macmillan.

    Google Scholar 

  • Chapman, B., T. Higgins and D. Taylor (2009) “Income Contingent Loans for Mature Aged Training,” Australian Journal of Labour Economics, vol. 12, no. 2, pp. 167–79.

    Google Scholar 

  • Chapman, B. and R. Simes (2006) “Profit Contingent Loans for Social Community Investment Projects in Disadvantaged Regions,” Public Policy, vol. 1, no. 2, pp. 93–102.

    Google Scholar 

  • Denniss, A., M. Yuan and G. Withers (2009) “Innovation Financing and Use of Income Contingent Loans,” Australian Journal of Labour Economics, vol. 12, no. 2, pp. 145–65.

    Google Scholar 

  • Denniss R. (2011) “Income Contingent Loans for Legal Aid Expansion,” The Australia Institute.

    Google Scholar 

  • Denniss, R. (2014) “Utilising the Transactional Efficiencies of Contngent Loans: A General Framework for Policy Application,” in Bruce Chapman, Timothy Higgins and Joseph

    Google Scholar 

  • E. Stiglitz (eds), Income Contingent Loans: Theory, Practice and Prospects, New York and Basingstoke: Palgrave Macmillan, pp. 248–59.

    Google Scholar 

  • Denniss, R. and C. Hamilton (2007) “Elite Athlete Financing,” The Australia Institute.

    Google Scholar 

  • Dobes, L. and B. Chapman (2012) “Financing Adaptation to Climate-Induced Retreat from Coastal Inundation and Erosion,” CCEP Working Paper 1113, Crawford School of Public Policy, The Australian National University.

    Google Scholar 

  • Gans, J. and S. King (2006) “The Housing Lifeline: A Housing Affordability Policy,” Agenda, vol. 11, no. 2, pp. 143–55.

    Google Scholar 

  • Garnaut, R. and R. Namaliu (2010) “PNG Universities Review: Report to Prime Ministers Somare and Rudd.” Online at http://aid.dfat.gov.au/countries/Documents/png-universities-review.pdf.

  • Higgins, T. (2010) Essays in the Development and Costing of Income Contingent Loans, PhD Thesis, College of Business and Economics, The Australian National University.

    Google Scholar 

  • Higgins, T. and M. Sinning (2013) “Modelling Income Dynamics for Public Policy Design: An Application to Income Contingent Student Loans,” Economics of Education Review, vol. 37, pp. 273–85.

    CrossRef  Google Scholar 

  • Moss, D. (2003) When All Else Fails, Cambridge, MA: Harvard University Press.

    Google Scholar 

  • Quiggin, J. (2003) “The Welfare Effects of Income-contingent Financing of Higher Education,” Working Paper no. 428, Canberra: Faculty of Economics Australian National University.

    Google Scholar 

  • Shiller, R. (2003) The New Financial Order: Risk in the 21st Century, Princeton, NJ: Princeton University Press.

    Google Scholar 

  • Stiglitz, Joseph E. (2014) “Remarks on Income Contingent Loans: How Effective Can they be at Mitigating Risk?,” in Bruce Chapman, Timothy Higgins and Joseph E. Stiglitz (eds), Income Contingent Loans: Theory, Practice and Prospects, Basingstoke and New York: Palgrave Macmillan, pp. 39–48.

    Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Editor information

Editors and Affiliations

Copyright information

© 2016 Bruce Chapman

About this chapter

Cite this chapter

Chapman, B. (2016). Income Contingent Loans as a General Risk Management Instrument. In: Stiglitz, J.E., Guzman, M. (eds) Contemporary Issues in Microeconomics. International Economic Association Series. Palgrave Macmillan, London. https://doi.org/10.1057/9781137529718_8

Download citation