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Redistribution and Subsidies for Higher Education

  • Bevia, Carmen
  • Iturbe-Ormaetxe, Inigo

The financing of higher education through public spending imposes a transfer of resources from taxpayers to university students and their parents. We provide an explanation for this phenomenon. Those who attend institutions of higher education will earn more income in the future and will pay more taxes. People whose children do not receive higher education, however, should agree to help pay the cost of such education, providing that taxes are sufficiently high to ensure an adequate redistribution in favor of their own children at some time in the future. Copyright 2002 by The editors of the Scandinavian Journal of Economics.

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Article provided by Wiley Blackwell in its journal Scandinavian Journal of Economics.

Volume (Year): 104 (2002)
Issue (Month): 2 (June)
Pages: 321-40

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Handle: RePEc:bla:scandj:v:104:y:2002:i:2:p:321-40
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  1. Blomquist, N. Soren, 1982. "Should educational expenses be deductible? : A comparison of tax bases in a model where education is a choice variable," Journal of Public Economics, Elsevier, vol. 18(1), pages 65-83, June.
  2. Barr, Nicholas, 1993. "Alternative Funding Resources for Higher Education," Economic Journal, Royal Economic Society, vol. 103(418), pages 718-28, May.
  3. George Psacharopoulos, 1985. "Returns to Education: A Further International Update and Implications," Journal of Human Resources, University of Wisconsin Press, vol. 20(4), pages 583-604.
  4. Johnson, George E, 1984. "Subsidies for Higher Education," Journal of Labor Economics, University of Chicago Press, vol. 2(3), pages 303-18, July.
  5. Bergstrom, T. & Blomqust, S., 1993. "The Political Econmomy of Subsidized Day Care," Papers 1993-15, Uppsala - Working Paper Series.
  6. Ted Bergstrom & Soren Blomquist, 1994. "Political Economy of Subsidized Day Care," Public Economics 9401001, EconWPA.
  7. Nerlove, Marc, 1972. "On Tuition and the Costs of Higher Education: Prolegomena to a Conceptual Framework," Journal of Political Economy, University of Chicago Press, vol. 80(3), pages S178-S218, Part II, .
  8. Raquel Fernandez & Richard Rogerson, 1994. "On the political economy of education subsidies," Staff Report 185, Federal Reserve Bank of Minneapolis.
  9. Garratt, Rod & Marshall, John M, 1994. "Public Finance of Private Goods: The Case of College Education," Journal of Political Economy, University of Chicago Press, vol. 102(3), pages 566-82, June.
  10. Creedy, John & Francois, Patrick, 1990. "Financing higher education and majority voting," Journal of Public Economics, Elsevier, vol. 43(2), pages 181-200, November.
  11. Allen, Franklin, 1982. "Optimal linear income taxation with general equilibrium effects on wages," Journal of Public Economics, Elsevier, vol. 17(2), pages 135-143, March.
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