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Subsidizing Enjoyable Education

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  • Dur, Robert
  • Glazer, Amihai

Abstract

College education is not only an investment; for many people it also generates consumption benefits. If these benefits are normal goods, then the rich attend college at higher rates than the poor. Furthermore, the marginal poor student is smarter than the marginal rich student. Colleges aiming to attract smart students may therefore charge lower tuition to poorer students, even when the colleges lack market power. Moreover, when the social return to education exceeds the private return, allocative efficiency requires government grants to students to be means-tested.

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Bibliographic Info

Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 15 (2008)
Issue (Month): 5 (October)
Pages: 1023-1039

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Handle: RePEc:eee:labeco:v:15:y:2008:i:5:p:1023-1039

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Keywords: H52 I2 Tuition policy Student grants Self-selection;

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References

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Cited by:
  1. Piolatto, Amedeo, 2010. "Education and selective vouchers," Economics of Education Review, Elsevier, vol. 29(6), pages 993-1004, December.
  2. Annette Alstadsæter, 2011. "Measuring the Consumption Value of Higher Education," CESifo Economic Studies, CESifo, vol. 57(3), pages 458-479, September.
  3. Daniel Montolio & Amedeo Piolatto, 2011. "Financing public education when altruistic agents have retirement concerns," Working Papers 2011/30, Institut d'Economia de Barcelona (IEB).
  4. Konrad, Kai A. & Skaperdas, Stergios, 2012. "The market for protection and the origin of the state," Munich Reprints in Economics 13961, University of Munich, Department of Economics.
  5. Wei-Bin Zhang, 2013. "A Synthesis Of The Uzawa-Lucas Model With The Walrasian-General-Equilibrium And Neoclassical-Growth Theories," Economic Annals, Faculty of Economics, University of Belgrade, vol. 58(199), pages 7-38, October -.

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