Refinancing Europe’s Higher Education through Deferred and Income-Contingent Fees: An empirical assessment using Belgian, German and UK data
AbstractThe arguments for refinancing the European Union's (EU) higher education via higher tuition fees largely rest on preserving the profitability of the educational investment and offering deferred and income-contingent payments. Using income survey datasets on Belgium, Germany and the United Kingdom (UK) we first estimate how graduates' private return on educational investment is likely to be affected by higher private contributions. We then evaluate the effect of income-contingent and deferred payment mechanisms on lifetime net income and its capacity to account for graduates' ability to pay, considering numerous ways of financing the cost of introducing income-contingency. Our analysis reveals that increasing individuals' contributions to higher education costs, through income-contingent and deferred instruments, does not significantly affect the private rate of return of heterogeneous graduates, allows for payments to be indexed to ability to pay, and can be implemented in ways that minimize the risk of adverse selection. These findings prove robust to significant variations between countries' unharmonised higher education institutional structures.
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.
Bibliographic InfoPaper provided by Centre for Analysis of Social Exclusion, LSE in its series CASE Papers with number /124.
Date of creation: Jun 2007
Date of revision:
Contact details of provider:
Web page: http://sticerd.lse.ac.uk/case/_new/publications/default.asp
Higher Education Finance; income-contingent loans; risk pooling and risk shifting;
Find related papers by JEL classification:
- I28 - Health, Education, and Welfare - - Education - - - Government Policy
- H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-02-02 (All new papers)
- NEP-EDU-2008-02-02 (Education)
- NEP-EEC-2008-02-02 (European Economics)
- NEP-HRM-2008-02-02 (Human Capital & Human Resource Management)
- NEP-LAB-2008-02-02 (Labour Economics)
- NEP-SOG-2008-02-02 (Sociology of Economics)
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.:
- Chapman, B., 1996.
"Conceptual Issues and the Australian Experience with Income Contingent Charges for Higher Education,"
CEPR Discussion Papers
350, Centre for Economic Policy Research, Research School of Economics, Australian National University.
- Chapman, Bruce, 1997. "Conceptual Issues and the Australian Experience with Income Contingent Charges for Higher Education," Economic Journal, Royal Economic Society, vol. 107(442), pages 738-51, May.
- 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 F150-F166, February.
- Barr, Nicholas, 2001. "The Welfare State as Piggy Bank: Information, Risk, Uncertainty, and the Role of the State," OUP Catalogue, Oxford University Press, number 9780199246595.
- Chapman, Bruce, 2006.
"Income Contingent Loans for Higher Education: International Reforms,"
Handbook of the Economics of Education,
- 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.
- Thomas Lemieux, 2006.
"Postsecondary Education and Increasing Wage Inequality,"
American Economic Review,
American Economic Association, vol. 96(2), pages 195-199, May.
- Thomas Lemieux, 2006. "Post-Secondary Education and Increasing Wage Inequality," NBER Working Papers 12077, National Bureau of Economic Research, Inc.
- repec:ner:lselon:http://eprints.lse.ac.uk/288/ is not listed on IDEAS
- Van der Linden, Bruno & Dor, Eric, 2001. "Labor Market Policies and Equilibrium Employment : Theory and Application for Belgium," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2001005, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- Nicholas Barr, 2004. "Higher Education Funding," Oxford Review of Economic Policy, Oxford University Press, vol. 20(2), pages 264-283, Summer.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.