Voting On Income‐Contingent Loans For Higher Education
AbstractWe consider risk-averse individuals who differ in two characteristics - ability to benefit from education and inherited wealth - and analyze higher education participation under two alternative financing schemes - tax subsidy and (risk-sharing) income-contingent loans. With decreasing absolute risk aversion, wealthier individuals are more likely to undertake higher education despite the fact that, according to the stylized financing schemes we consider, individuals do not pay any up-front financial cost of education. We then determine which financing scheme arises when individuals are allowed to vote between schemes. We show that the degree of risk aversion plays a crucial role in determining which financing scheme obtains a majority, and that the composition of the support group for each financing scheme can be of two different types.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by The Economic Society of Australia in its journal The Economic Record.
Volume (Year): 88 (2012)
Issue (Month): s1 (06)
Contact details of provider:
Postal: Central Council Administration, L.P.O. Box 2161, Hawthorn VIC 3122
Phone: 61 3 9497 4140
Fax: 61 3 9497 4140
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0013-0249
More information through EDIRC
Other versions of this item:
- Elena Del Rey & Maria Racionero, 2011. "Voting on income-contingent loans for higher education," ANU Working Papers in Economics and Econometrics 2011-549, Australian National University, College of Business and Economics, School of Economics.
- H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
- I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- DEL REY, Elena & RACIONERO, Maria, .
"Financing schemes for higher education,"
CORE Discussion Papers RP
-2181, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Dan Anderberg & Alessandro Balestrino, 2008. "The Political Economy of Post-Compulsory Education Policy with Endogenous Credit Constraints," CESifo Working Paper Series 2304, CESifo Group Munich.
- Rainald Borck & Martin Wimbersky, 2009.
"Political Economics of Higher Education Finance,"
CESifo Working Paper Series
2829, CESifo Group Munich.
- Bruce Chapman, 2005.
"Income Contingent Loans for Higher Education: International Reform,"
CEPR Discussion Papers
491, Centre for Economic Policy Research, Research School of Economics, Australian National University.
- Chapman, Bruce, 2006. "Income Contingent Loans for Higher Education: International Reforms," Handbook of the Economics of Education, Elsevier.
- Garcia-Penalosa, Cecilia & Walde, Klaus, 2000. "Efficiency and Equity Effects of Subsidies to Higher Education," Oxford Economic Papers, Oxford University Press, vol. 52(4), pages 702-22, October.
- De Fraja, Gianni, 2001. "Education Policies: Equity, Efficiency and Voting Equilibrium," Economic Journal, Royal Economic Society, vol. 111(471), pages C104-19, May.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Are income-contingent loans for higher education feasible?
by Economic Logician in Economic Logic on 2011-09-01 14:21:00
- Elena Del Rey & María Racionero, 2014.
"Choosing the type of income-contingent loan: risk-sharing versus risk-pooling,"
2014/7, Institut d'Economia de Barcelona (IEB).
- Maria Racionero & Elena Del Rey, 2012. "Choosing the type of income-contingent loan: risk-sharing versus risk-pooling," CEPR Discussion Papers 671, Centre for Economic Policy Research, Research School of Economics, Australian National University.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.