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An Economic Analysis of Higher Education Financing Policies


  • Juan Matías Sánchez

    (University of Rochester)


This paper develops a model in which it is possible to evaluate alternatives of higher education financing. The alternative systems under discussion are: total feeing, graduates’ taxes and uniform taxes (this can be associated to the scheme presently used in the Argentina to finance the Universities). Assessment of the alternatives is performed over welfare, based on the indicators of poverty, equality, and the average levels of utility and wealth. Likewise, the functions of welfare presented by Bentham, Rawls, Atkinson, Sen and Kakwani are also considered. The most remarkable results are obtained through the simulation of an economy under two scenarios. In that way, the system of graduates’ taxation is found to be better for welfare; whereas the system of uniform taxation only can be justified as it maximizes the number of students.

Suggested Citation

  • Juan Matías Sánchez, 2005. "An Economic Analysis of Higher Education Financing Policies," Económica, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata, vol. 0(1-2), pages 137-184, January-D.
  • Handle: RePEc:lap:journl:545

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    More about this item


    Human Capital; Welfare; Overlapping Generations;

    JEL classification:

    • H1 - Public Economics - - Structure and Scope of Government
    • I2 - Health, Education, and Welfare - - Education
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration


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