The Evolution of Public Spending on Higher Education in a Democracy
AbstractThis paper analyses political forces that cause an initial expansion of public spending on higher education and an ensuing decline in subsidies. Growing public expenditures increase the future size of the higher income class and thus boost future demand for education. This demand shift implies that the initial subsidy per student becomes too expensive to be politically sustainable. Despite a voters’ backlash that curbs education subsidies, overall enrolments continue to rise. But the participation rate of the children of lower income families, that went up in the expansion period, declines over time, both in absolute terms and relative to the rate of their counterparts from higher income households.
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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 1631.
Date of creation: 2005
Date of revision:
higher education; voting; social stratification; social mobility; overlapping generations;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-01-29 (All new papers)
- NEP-CDM-2006-01-29 (Collective Decision-Making)
- NEP-EDU-2006-01-29 (Education)
- NEP-PBE-2006-01-29 (Public Economics)
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