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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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    References listed on IDEAS

    1. Joan Esteban & Carlos Gradin & Debraj Ray, 1999. "Extensions of a Measure of Polarization with an Application to the Income Distribution of Five OECD Countries," LIS Working papers 218, LIS Cross-National Data Center in Luxembourg.
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    3. Wolfson, Michael C, 1994. "When Inequalities Diverge," American Economic Review, American Economic Association, vol. 84(2), pages 353-358, May.
    4. Trejos S., Juan Diego, 1999. "Reformas económicas y distribución del ingreso en Costa Rica," Series Históricas 37, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    5. Altimir, Oscar, 1994. "Income distribution and poverty through crisis and adjustment," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    6. Cowell, F.A., 2000. "Measurement of inequality," Handbook of Income Distribution,in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 2, pages 87-166 Elsevier.
    7. Leonardo Gasparini & Walter Sosa, 2001. "Assessing Aggregate Welfare: Growth and Inequality in Argentina," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 38(113), pages 49-71.
    8. Morley, S. & Vos, R.P., 1997. "Poverty and dualistic growth in Paraguay," ISS Working Papers - General Series 19004, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    9. Miguel Székely & Marianne Hilgert, 1999. "What's Behind the Inequality we Measure: An Investigation Using Latin American Data," Research Department Publications 4188, Inter-American Development Bank, Research Department.
    10. Morley, Samuel A., 2001. "The income distribution problem in Latin America and the Caribbean," Libros de la CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 65 edited by Eclac.
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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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