Political economics of higher education finance
AbstractWe study voting over higher education finance in an economy with risk averse households who are heterogeneous in income. We compare four different systems and analyse voters' choices among them: a traditional subsidy scheme, a pure loan scheme, income contingent loans and graduate taxes. Using numerical simulations, we find that majorities for income contingent loans or graduate taxes become more likely as the income distribution gets more equal. We also perform sensitivity analyses with respect to risk aversion and the elasticity of substitution between high skilled and low skilled workers.
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Bibliographic InfoPaper provided by Institut d'Economia de Barcelona (IEB) in its series Working Papers with number 2010/17.
Length: 37 pages
Date of creation: 2010
Date of revision:
Voting; higher education; financing scheme;
Other versions of this item:
- 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-05-15 (All new papers)
- NEP-CDM-2010-05-15 (Collective Decision-Making)
- NEP-CMP-2010-05-15 (Computational Economics)
- NEP-EDU-2010-05-15 (Education)
- NEP-POL-2010-05-15 (Positive Political Economics)
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