YOUTH WAGES, RISK, AND TERTIARY FINANCE ARRANGEMENTS

Human capital earnings functions typically explain a small fraction of the total variation in earnings. the considerable uncertainty associa ted with expected future earnings streams enhances the desirability of a loans scheme for higher education possessing income contingent char acteristics on the repayment side. The Higher Education Contribution S cheme (HECS) possesses this feature. The profitability of higher educa tion even after taking account of the HECS suggests there is scope for higher student contributions. Other possible modifications to the HEC S include higher repayment rates, a change to the tax base, and a mini mum repayment amount.