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Are Public Subsidies to Higher Education Regressive ?

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  • William R. Johnson

Abstract

This paper estimates the dollar amount of public higher education subsidies received by U.S. youth and examines the distribution of subsidies and the taxes which finance them across parental and student income levels. Although youths from highincome families obtain more benefit from higher education subsidies, high-income households pay sufficiently more in taxes that the net effect of the spending and associated taxation is distributionally neutral or mildly progressive. These results are robust to alternative assumptions and are consistent with Hansen and Weisbrod’s earlier celebrated findings for California, although not with the conclusions often drawn from those findings.

Suggested Citation

  • William R. Johnson, 2005. "Are Public Subsidies to Higher Education Regressive ?," Virginia Economics Online Papers 365, University of Virginia, Department of Economics.
    • Handle: RePEc:vir:virpap:365
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    References listed on IDEAS

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    12. Hansen, W Lee, 1970. "Income Distribution Effects of Higher Education," American Economic Review, American Economic Association, vol. 60(2), pages 335-340, May.
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    14. James J. Heckman & Lance Lochner & Christopher Taber, 1999. "General Equilibrium Cost Benefit Analysis of Education and Tax Policies," NBER Working Papers 6881, National Bureau of Economic Research, Inc.
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    Citations

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    Cited by:

    1. Cécile Bonneau & Sébastien Grobon, 2022. "Unequal access to higher education based on parental income: evidence from France ," World Inequality Lab Working Papers halshs-03693195, HAL.
    2. Jordi Jofre-Monseny & Martin Wimbersky, 2010. "Political economics of higher education finance," Working Papers 2010/17, Institut d'Economia de Barcelona (IEB).
    3. Hoyt Bleakley & Bhanu Gupta, 2020. "Mind the Gap: Schooling, Informality and Fiscal Externalities in Nepal," Working Papers 46, Ashoka University, Department of Economics.
    4. Owen, Sally Margaret Frean, 2017. "The unfortunate regressivity of public natural disaster insurance: Quantifying distributional implications of EQC building cover for New Zealand," Working Paper Series 6720, Victoria University of Wellington, School of Economics and Finance.
    5. Adam Looney & Constantine Yannelis, 2015. "A Crisis in Student Loans? How Changes in the Characteristics of Borrowers and in the Institutions They Attended Contributed to Rising Loan Defaults," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 46(2 (Fall)), pages 1-89.
    6. Rainald Borck & Martin Wimbersky, 2014. "Political economics of higher education finance," Oxford Economic Papers, Oxford University Press, vol. 66(1), pages 115-139, January.
    7. Owen, Sally & Noy, Ilan, 2017. "The unfortunate regressivity of public natural hazard insurance: A quantitative analysis of a New Zealand case," Working Paper Series 20247, Victoria University of Wellington, School of Economics and Finance.
    8. Cook, Emily E. & Turner, Sarah, 2022. "Progressivity of pricing at US public universities," Economics of Education Review, Elsevier, vol. 88(C).
    9. Cécile Bonneau & Sébastien Grobon, 2022. "Unequal access to higher education based on parental income: evidence from France ," Working Papers halshs-03693195, HAL.
    10. Cécile Bonneau & Sébastien Grobon, 2023. "Parental Income and Higher Education Patterns: Evidence From France," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-03573453, HAL.
    11. Di, Zhu Xiao & Belsky, Eric & Liu, Xiaodong, 2007. "Do homeowners achieve more household wealth in the long run?," Journal of Housing Economics, Elsevier, vol. 16(3-4), pages 274-290, November.
    12. Howard Chernick, 2010. "Redistribution at the State and Local Level: Consequences for Economic Growth," Public Finance Review, , vol. 38(4), pages 409-449, July.
    13. Cécile Bonneau & Sébastien Grobon, 2022. "Unequal access to higher education based on parental income: evidence from France ," PSE Working Papers halshs-03693195, HAL.
    14. Rainald Borck & Martin Wimbersky, 2014. "Political economics of higher education finance," Oxford Economic Papers, Oxford University Press, vol. 66(1), pages 115-139, January.
    15. Sally Owen & Ilan Noy, 2019. "Regressivity in Public Natural Hazard Insurance: a Quantitative Analysis of the New Zealand Case," Economics of Disasters and Climate Change, Springer, vol. 3(3), pages 235-255, October.

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    More about this item

    Keywords

    : higher education; subsidy; progressivity Classification-JH23; I22;
    All these keywords.

    JEL classification:

    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy

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    This paper has been announced in the following NEP Reports:

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