IDEAS home Printed from https://ideas.repec.org/a/wly/econjl/v118y2008i526pf100-f125.html
   My bibliography  Save this article

Higher Education Funding Reforms in England: The Distributional Effects and the Shifting Balance of Costs

Author

Listed:
  • Lorraine Dearden
  • Emla Fitzsimons
  • Alissa Goodman
  • Greg Kaplan

Abstract

This article undertakes a quantitative analysis of substantial reforms to the system of higher education (HE) finance in England, first announced in 2004 and revised in 2007. The reforms introduced deferred fees for HE, payable by graduates through the tax system via income‐contingent repayments on loans subsidised by the government. The article uses lifetime earnings simulated by the authors to consider the likely distributional consequences of the reforms for graduates. It also considers the costs of the reforms for taxpayers, and how the reforms are likely to shift the balance of funding for HE between the public and private sectors.

Suggested Citation

  • Lorraine Dearden & Emla Fitzsimons & Alissa Goodman & Greg Kaplan, 2008. "Higher Education Funding Reforms in England: The Distributional Effects and the Shifting Balance of Costs," Economic Journal, Royal Economic Society, vol. 118(526), pages 100-125, February.
    • Handle: RePEc:wly:econjl:v:118:y:2008:i:526:p:f100-f125
    DOI: 10.1111/j.1468-0297.2007.02118.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1468-0297.2007.02118.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1468-0297.2007.02118.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Heckman, James J & Lochner, Lance & Taber, Christopher, 1998. "General-Equilibrium Treatment Effects: A Study of Tuition Policy," American Economic Review, American Economic Association, vol. 88(2), pages 381-386, May.
    2. Stéphane Bonhomme & Jean-Marc Robin, 2006. "Modeling Individual Earnings Trajectories Using Copulas: France, 1990-2002," Post-Print hal-03587648, HAL.
    3. Chen, Xiaohong & Fan, Yanqin & Tsyrennikov, Viktor, 2006. "Efficient Estimation of Semiparametric Multivariate Copula Models," Journal of the American Statistical Association, American Statistical Association, vol. 101, pages 1228-1240, September.
    4. Andrew J. Patton, 2006. "Estimation of multivariate models for time series of possibly different lengths," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 21(2), pages 147-173, March.
    5. Eaton, Jonathan & Rosen, Harvey S, 1980. "Taxation, Human Capital, and Uncertainty," American Economic Review, American Economic Association, vol. 70(4), pages 705-715, September.
    6. Gianni de Fraja, 2002. "The Design of Optimal Education Policies," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 69(2), pages 437-466.
    7. Nicholas Barr, 2004. "Higher Education Funding," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 20(2), pages 264-283, Summer.
    8. Barr, Nicholas, 1993. "Alternative Funding Resources for Higher Education," Economic Journal, Royal Economic Society, vol. 103(418), pages 718-728, May.
    9. Roland Benabou, 2002. "Tax and Education Policy in a Heterogeneous-Agent Economy: What Levels of Redistribution Maximize Growth and Efficiency?," Econometrica, Econometric Society, vol. 70(2), pages 481-517, March.
    10. Levhari, David & Weiss, Yoram, 1974. "The Effect of Risk on the Investment in Human Capital," American Economic Review, American Economic Association, vol. 64(6), pages 950-963, December.
    11. Barr, Nicholas, 2004. "Higher education funding," LSE Research Online Documents on Economics 288, London School of Economics and Political Science, LSE Library.
    12. Chapman, Bruce, 2006. "Income Contingent Loans for Higher Education: International Reforms," Handbook of the Economics of Education, in: Erik Hanushek & F. Welch (ed.), Handbook of the Economics of Education, edition 1, volume 2, chapter 25, pages 1435-1503, Elsevier.
    13. Andrew J. Patton, 2006. "Modelling Asymmetric Exchange Rate Dependence," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 47(2), pages 527-556, May.
    14. Keane, Michael P & Wolpin, Kenneth I, 1997. "The Career Decisions of Young Men," Journal of Political Economy, University of Chicago Press, vol. 105(3), pages 473-522, June.
    15. Barr, Nicholas, 1993. "Alternative funding resources for higher education," LSE Research Online Documents on Economics 280, London School of Economics and Political Science, LSE Library.
    16. Stéphane Bonhomme & Jean-Marc Robin, 2006. "Modeling Individual Earnings Trajectories Using Copulas: France, 1990-2002," Post-Print hal-00308802, HAL.
    17. Kodde, David A, 1986. "Uncertainty and the Demand for Education," The Review of Economics and Statistics, MIT Press, vol. 68(3), pages 460-467, August.
    18. Nerlove, Marc L, 1975. "Some Problems in the Use of Income-contingent Loans for the Finance of Higher Education," Journal of Political Economy, University of Chicago Press, vol. 83(1), pages 157-183, February.
    19. Stéphane Bonhomme & Jean-Marc Robin, 2006. "Modeling Individual Earnings Trajectories Using Copulas: France, 1990-2002," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00308802, HAL.
    20. David Greenaway & Michelle Haynes, 2003. "Funding Higher Education in The UK: The Role of Fees and Loans," Economic Journal, Royal Economic Society, vol. 113(485), pages 150-166, February.
    21. Henning Bunzel & Bent J. Christensen & Georges R. Neumann & Jean-Marc Robin, 2006. "Structural Models of Wage and Employment Dynamics," Post-Print hal-00308804, HAL.
    22. Raquel Fernandez & Richard Rogerson, 1995. "On the Political Economy of Education Subsidies," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 62(2), pages 249-262.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lorraine Dearden & Emla Fitzsimons & Alissa Goodman & Greg Kaplan, 2008. "The effects of higher education funding reforms on the lifetime incomes of graduates," CEE Discussion Papers 0078, Centre for the Economics of Education, LSE.
    2. Rainald Borck & Martin Wimbersky, 2014. "Political economics of higher education finance," Oxford Economic Papers, Oxford University Press, vol. 66(1), pages 115-139, January.
    3. Jordi Jofre-Monseny & Martin Wimbersky, 2010. "Political economics of higher education finance," Working Papers 2010/17, Institut d'Economia de Barcelona (IEB).
    4. Fossen, Frank M. & Glocker, Daniela, 2017. "Stated and revealed heterogeneous risk preferences in educational choice," European Economic Review, Elsevier, vol. 97(C), pages 1-25.
    5. Migali, Giuseppe, 2012. "Funding higher education and wage uncertainty: Income contingent loan versus mortgage loan," Economics of Education Review, Elsevier, vol. 31(6), pages 871-889.
    6. Tom McKenzie & Dirk Sliwka, 2011. "Universities as Stakeholders in their Students' Careers: On the Benefits of Graduate Taxes to Finance Higher Education," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 167(4), pages 726-742, December.
    7. Gianluca Violante & Giovanni Gallipoli & Costas Meghir, 2005. "Education Decisions, Equilibrium Policies and Wages Dispersion," 2005 Meeting Papers 522, Society for Economic Dynamics.
    8. Bernhard Eckwert & Itzhak Zilcha, 2017. "Student loans: When is risk sharing desirable?," International Journal of Economic Theory, The International Society for Economic Theory, vol. 13(2), pages 217-231, June.
    9. Stephan Thomsen & Friederike von Haaren-Giebel, 2016. "Did tuition fees in Germany constrain students’ budgets? New evidence from a natural experiment," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-25, December.
    10. Lergetporer, P & Woessmann, L, 2022. "Income Contingency and the Electorates Support for Tuition," CAGE Online Working Paper Series 606, Competitive Advantage in the Global Economy (CAGE).
    11. Florian Oswald, 2015. "Regional Shocks, Migration and Homeownership," Sciences Po publications info:hdl:2441/n1d9kd7k48k, Sciences Po.
    12. Lergetporer, Philipp & Woessmann, Ludger, 2019. "The Political Economy of Higher Education Finance: How Information and Design Affect Public Preferences for Tuition," Rationality and Competition Discussion Paper Series 145, CRC TRR 190 Rationality and Competition.
    13. Migali, Giuseppe, 2006. "Funding Higher Education and Wage Uncertainty: Income Contingent Loan Versus Mortgate Loan," The Warwick Economics Research Paper Series (TWERPS) 740, University of Warwick, Department of Economics.
    14. Bas Jacobs & Sweder J. G. van Wijnbergen, 2007. "Capital-Market Failure, Adverse Selection, and Equity Financing of Higher Education," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 63(1), pages 1-32, March.
    15. repec:hal:spmain:info:hdl:2441/n1d9kd7k48keoo4brb07foqbd is not listed on IDEAS
    16. Findeisen, Sebastian & Sachs, Dominik, 2016. "Education and optimal dynamic taxation: The role of income-contingent student loans," Journal of Public Economics, Elsevier, vol. 138(C), pages 1-21.
    17. Florian Oswald, 2015. "Regional Shocks, Migration and Homeownership," 2015 Meeting Papers 759, Society for Economic Dynamics.
    18. Vandenberghe, Vincent & Debande, Olivier, 2008. "Refinancing Europe's higher education through deferred and income-contingent fees: An empirical assessmentusing Belgian, German & UK data," European Journal of Political Economy, Elsevier, vol. 24(2), pages 364-386, June.
    19. Akyol, Ahmet & Athreya, Kartik, 2005. "Risky higher education and subsidies," Journal of Economic Dynamics and Control, Elsevier, vol. 29(6), pages 979-1023, June.
    20. O Debande & Vincent Vandenberghe, 2007. "Refinancing Europe’s Higher Education through Deferred and Income-Contingent Fees: An empirical assessment using Belgian, German and UK data," CASE Papers case124, Centre for Analysis of Social Exclusion, LSE.
    21. Panu Poutvaara, 2003. "Educating Europe," Public Economics 0302008, University Library of Munich, Germany.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:econjl:v:118:y:2008:i:526:p:f100-f125. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/resssea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.