Refinancing Europe's higher education through deferred and income-contingent fees: An empirical assessmentusing Belgian, German & UK data
The arguments for refinancing the European Union's (EU) higher education via higher tuition fees largely rest on preserving the profitability of the educational investment and offering deferred and income-contingent payments. Using income survey datasets on Belgium, Germany and the United Kingdom (UK) we first estimate how graduates' private return on educational investment is likely to be affected by higher private contributions. We then evaluate the effect of income-contingent and deferred payment mechanisms on lifetime net income and its capacity to account for graduates' ability to pay, considering numerous ways of financing the cost of introducing income-contingency. Our analysis reveals that increasing individuals' contributions to higher education costs, through income-contingent and deferred instruments, does not significantly affect the private rate of return of heterogeneous graduates, allows for payments to be indexed to ability to pay, and can be implemented in ways that minimize the risk of adverse selection. These findings prove robust to significant variations between countries' unharmonised higher education institutional structures.
References listed on IDEAS
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.:
- Van der Linden, Bruno & Dor, Eric, 2001. "Labor Market Policies and Equilibrium Employment : Theory and Application for Belgium," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2001005, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- Bruce Chapman, 2001.
"Australian Higher Education Financing: Issues for Reform,"
Australian Economic Review,
The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 34(2), pages 195-204.
- Bruce Chapman, 2001. "Australian Higher Education Financing: Issues for Reform," CEPR Discussion Papers 434, Centre for Economic Policy Research, Research School of Economics, Australian National University.
- Thomas Lemieux, 2006.
"Post-Secondary Education and Increasing Wage Inequality,"
NBER Working Papers
12077, National Bureau of Economic Research, Inc.
- Thomas Lemieux, 2006. "Postsecondary Education and Increasing Wage Inequality," American Economic Review, American Economic Association, vol. 96(2), pages 195-199, May.
- Barr, Nicholas, 2001. "The Welfare State as Piggy Bank: Information, Risk, Uncertainty, and the Role of the State," OUP Catalogue, Oxford University Press, number 9780199246595.
- Chapman, Bruce, 1997.
"Conceptual Issues and the Australian Experience with Income Contingent Charges for Higher Education,"
Royal Economic Society, vol. 107(442), pages 738-751, May.
- Chapman, B., 1996. "Conceptual Issues and the Australian Experience with Income Contingent Charges for Higher Education," CEPR Discussion Papers 350, Centre for Economic Policy Research, Research School of Economics, Australian National University.
- Nicholas Barr, 2004. "Higher Education Funding," Oxford Review of Economic Policy, Oxford University Press, vol. 20(2), pages 264-283, Summer.
- James Heckman & Pedro Carneiro, 2003.
"Human Capital Policy,"
NBER Working Papers
9495, National Bureau of Economic Research, Inc.
- Nicholas Barr, 2004. "Higher education funding," LSE Research Online Documents on Economics 288, London School of Economics and Political Science, LSE Library.
- Chapman, Bruce, 2006.
"Income Contingent Loans for Higher Education: International Reforms,"
Handbook of the Economics of Education,
- Bruce Chapman, 2005. "Income Contingent Loans for Higher Education: International Reform," CEPR Discussion Papers 491, Centre for Economic Policy Research, Research School of Economics, Australian National University.
- Angel de la Fuente, 2003. "Human Capital in a global and knowledge-based economy, part II: assessment at the EU country level," Working Papers 98, Barcelona Graduate School of Economics.
- David Greenaway & Michelle Haynes, 2003. "Funding Higher Education in The UK: The Role of Fees and Loans," Economic Journal, Royal Economic Society, vol. 113(485), pages 150-166, February.
- Bas Jacobs, 2002. "An investigation of education finance reform; graduate taxes and income contingent loans in the Netherlands," CPB Discussion Paper 9, CPB Netherlands Bureau for Economic Policy Analysis.
When requesting a correction, please mention this item's handle: RePEc:eee:poleco:v:24:y:2008:i:2:p:364-386. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.