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The Access Implications of Income Contingent Charges for Higher Education: Lessons from Australia

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  • Bruce Chapman
  • Chris Ryan

Abstract

This paper describes the Higher Education Contribution Scheme (HECS), Australia's income contingent charge mechanism, and analyses its impact on the social composition of university participation. We analyse university participation data from three cohorts of young Australians. The first cohort completed their schooling prior to the introduction of HECS, the second following its introduction and the third after the scheme was amended substantially. We find that the social composition of participants was different in 1999 from that of 1988. However, the distribution was more equal than it was in the late 1980s. That outcome reflected the growth in participation in the middle of the wealth distribution, which was stronger than growth at either the top or the bottom of the distribution. Other aspects of university participation also changed: participation grew more strongly among females than males. We find no evidence that participation fell among 'marginal decision makers' - those who, while at school, said they did not intend to study at university. We conclude that HECS did not act to discourage university participation in general or among individuals from the lowest wealth groups.

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Bibliographic Info

Paper provided by Centre for Economic Policy Research, Research School of Economics, Australian National University in its series CEPR Discussion Papers with number 463.

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Length: 40 pages
Date of creation: Apr 2003
Date of revision:
Handle: RePEc:auu:dpaper:463

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  1. 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 157-83, February.
  2. Feldman, Roger, 1976. "Some More Problems with Income-contingent Loans: The Case of Medical Education," Journal of Political Economy, University of Chicago Press, vol. 84(6), pages 1305-11, December.
  3. Frank Cowell, 1998. "Measurement of inequality," LSE Research Online Documents on Economics 2084, London School of Economics and Political Science, LSE Library.
  4. Pagan,Adrian & Ullah,Aman, 1999. "Nonparametric Econometrics," Cambridge Books, Cambridge University Press, number 9780521355643, October.
  5. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
  6. Barrett, Garry F & Crossley, Thomas F & Worswick, Christopher, 2000. "Consumption and Income Inequality in Australia," The Economic Record, The Economic Society of Australia, vol. 76(233), pages 116-38, June.
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Cited by:
  1. Eckhard Janeba & Alexander Kemnitz & Nick Ehrhart, 2007. "Studiengebühren in Deutschland: Drei Thesen und ihr empirischer Gehalt," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 8(2), pages 184-205, 03.
  2. Buly A Cardak & Chris Ryan, 2007. "Participation in Higher Education: Equity and Access: Are Equity-based Scholarships an Answer?," Working Papers 2007.03, School of Economics, La Trobe University.
  3. Nicholas Barr, 2009. "Financing higher education: lessons from economic theory and reform in England," LSE Research Online Documents on Economics 30873, London School of Economics and Political Science, LSE Library.
  4. Wolfram F. Richter & Berthold U. Wigger, 2012. "Besteuerung des Humanvermögens," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 13(1-2), pages 82-102, 02.
  5. Buly A Cardak & Chris Ryan, 2006. "Why are high ability individuals from poor backgrounds under-represented at university?," Working Papers 2006.04, School of Economics, La Trobe University.
  6. Philip Wales, 2013. "Access All Areas? The Impact of Fees and Background on Student Demand for Postgraduate Higher Education in the UK," SERC Discussion Papers 0128, Spatial Economics Research Centre, LSE.
  7. Winter, Stefan & Pfitztner, Alexander, 2013. "Externalities and subsidization of higher education," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79993, Verein für Socialpolitik / German Economic Association.
  8. Nicholas Barr, 2008. "Education : Lessons from Economic Theory and Operational Experience," EABER Working Papers 21942, East Asian Bureau of Economic Research.
  9. John Jerrim & Anna Vignoles & Ross Finnie, 2012. "University access for disadvantaged children: A comparison across English speaking countries," DoQSS Working Papers 12-11, Department of Quantitative Social Science - Institute of Education, University of London.
  10. Paul Angles, 2013. "L'impôt sur le diplôme comme alternative au mode de financement de l'enseignement supérieur en France : une évaluation par microsimulation," Post-Print dumas-00909926, HAL.
  11. Bruce Chapman, 2008. "The Australian University Student Financing System : The Rationale for, and Experience with, Income Contingent Loans," EABER Working Papers 21944, East Asian Bureau of Economic Research.
  12. Nicholas Barr, 2004. "Higher education funding," LSE Research Online Documents on Economics 288, London School of Economics and Political Science, LSE Library.
  13. Schmid, Günther, 2006. "Sharing risk: on social risk management and the governance of labour market transitions," Discussion Papers, Research Unit: Labor Market Policy and Employment SP I 2006-101, Social Science Research Center Berlin (WZB).
  14. Erik Canton & A. Blom, 2004. "Do student loans improve accessibility to higher education and student performance? An impact study of the SOFES program in Mexico," CPB Discussion Paper 33, CPB Netherlands Bureau for Economic Policy Analysis.
  15. Canton, Erik & Blom, Andreas, 2004. "Can student loans improve accessibility to higher education and student performance? An impact study of the case of SOFES, Mexico," Policy Research Working Paper Series 3425, The World Bank.
  16. Bruce Chapman & Mark Rodrigues & Chris Ryan, 2007. "HECS for TAFE: The case for extending income contingent loans," Treasury Working Papers 2007-02, Treasury, Australian Government, revised Apr 2007.

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