The Political Economics of Higher Education Finance for Mobile Individuals
AbstractWe study voting over higher education finance in an economy with two regions and two separated labor markets. Households differ in their financial endowment and their children’s ability. Non-students are immobile. Students decide where to study; they return home after graduation with exogenous probability. The voters of the two regions decide on whether to subsidize higher education costs or whether to rely on tuition fees only. We find that in equilibrium, in both regions a majority votes for subsidies when the return probability is sufficiently small. When that probability is large, both regions opt for full tuition finance. Interestingly, the higher the return probability, the smaller are the equilibrium subsidy rates, but the larger are the numbers of exchange students.
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 CESifo Group Munich in its series CESifo Working Paper Series with number 3877.
Date of creation: 2012
Date of revision:
voting; higher education; financing scheme; mobility;
Other versions of this item:
- Übelmesser, Silke & Borck, Rainald & Wimbersky, Martin, 2013. "The Political Economics of Higher Education Finance for Mobile Individuals," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79717, Verein für Socialpolitik / German Economic Association.
- H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
- H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
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.:
- Gabrielle Demange & Robert Fenge & Silke Uebelmesser, 2012. "Financing Higher Education in a Mobile World," CESifo Working Paper Series 3849, CESifo Group Munich.
- Del Rey, Elena & Racionero, María, 2010.
"Financing schemes for higher education,"
European Journal of Political Economy,
Elsevier, vol. 26(1), pages 104-113, March.
- Panu Poutvaara, 2004.
CESifo Working Paper Series
1114, CESifo Group Munich.
- Rainald Borck & Martin Wimbersky, 2009.
"Political Economics of Higher Education Finance,"
CESifo Working Paper Series
2829, CESifo Group Munich.
- Johnson, George E, 1984. "Subsidies for Higher Education," Journal of Labor Economics, University of Chicago Press, vol. 2(3), pages 303-18, July.
- Katz, Lawrence F. & Autor, David H., 1999. "Changes in the wage structure and earnings inequality," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 26, pages 1463-1555 Elsevier.
- Iñigo Iturbe Ormaetxe & Carmen Beviá, 2000.
"Redistribution And Subsidies For Higher Education,"
Working Papers. Serie AD
2000-15, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
- Epple, Dennis & Romano, Richard E., 1996. "Ends against the middle: Determining public service provision when there are private alternatives," Journal of Public Economics, Elsevier, vol. 62(3), pages 297-325, November.
- Dreher, Axel & Poutvaara, Panu, 2011. "Foreign Students and Migration to the United States," World Development, Elsevier, vol. 39(8), pages 1294-1307, August.
- Fernandez, Raquel & Rogerson, Richard, 1995.
"On the Political Economy of Education Subsidies,"
Review of Economic Studies,
Wiley Blackwell, vol. 62(2), pages 249-62, April.
- Panu Poutvaara, 2008. "Public and Private Education in an Integrated Europe: Studying to Migrate and Teaching to Stay?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 110(3), pages 591-608, 09.
- Marcel Gerard, 2007. "Financing Bologna: Which Country will Pay for Foreign Students?," Education Economics, Taylor & Francis Journals, vol. 15(4), pages 441-454.
- Thomas Lange, 2009. "Public Funding of Higher Education when Students and Skilled Workers are Mobile," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 65(2), pages 178-199, June.
- JUSTMAN , Moshe & THISSE, Jacques-François, .
"Local public funding of higher education when skilled labor is imperfectly mobile,"
CORE Discussion Papers RP
-1460, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Moshe Justman & Jacques-Francois Thisse, 2000. "Local Public Funding of Higher Education When Skilled Labor is Imperfectly Mobile," International Tax and Public Finance, Springer, vol. 7(3), pages 247-258, May.
- Garcia-Penalosa, Cecilia & Walde, Klaus, 2000. "Efficiency and Equity Effects of Subsidies to Higher Education," Oxford Economic Papers, Oxford University Press, vol. 52(4), pages 702-22, October.
- Dan Anderberg & Alessandro Balestrino, 2008. "The Political Economy of Post-Compulsory Education Policy with Endogenous Credit Constraints," CESifo Working Paper Series 2304, CESifo Group Munich.
- Baruch, Yehuda & Budhwar, Pawan S. & Khatri, Naresh, 2007. "Brain drain: Inclination to stay abroad after studies," Journal of World Business, Elsevier, vol. 42(1), pages 99-112, March.
- Creedy, John & Francois, Patrick, 1990. "Financing higher education and majority voting," Journal of Public Economics, Elsevier, vol. 43(2), pages 181-200, November.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Julio Saavedra).
If references are entirely missing, you can add them using this form.