Free Higher Education - Regressive Transfer or Implicit Loan ?
AbstractShould access to higher education remain ‘free’ ? Theoretical answers to this question are at least twofold. First, public higher education is said to be regressive as a priviliged minority profits from extra human capital, and all the private benefits it generates, while the general public foots the bill. A frequent reply is that higher education students enjoying ‘free’ access are implicitly borrowing public money that they pay back when entering the labour market, via progressive income taxes. Using a simple lifecycle framework this paper produces realistic estimates of how much graduates are likely to ‘reimburse” society via income tax. Using Belgian data on higher education public expenditure and income taxes paid by both graduates and non-graduates over their lifetime, we show that the implicit reimbursement rate ranges from 37% to 95%. It is much higher for bachelors than master graduates, and for males
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Bibliographic InfoPaper provided by Université catholique de Louvain, Département des Sciences Economiques in its series Discussion Papers (ECON - Département des Sciences Economiques) with number 2005031.
Date of creation: 01 Jun 2005
Date of revision:
Higher Education Finance; Regressive Transfers; Implicit Loans;
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-2005-12-14 (All new papers)
- NEP-EDU-2005-12-14 (Education)
- NEP-HRM-2005-12-14 (Human Capital & Human Resource Management)
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.:
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