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The political economy of higher education finance: how information and design affect public preferences for tuition

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  • Philipp Lergetporer
  • Ludger Woessmann

Abstract

Public preferences for charging tuition are important for determining higher education finance. To test whether public support for tuition depends on information and design, we devise several survey experiments in representative samples of the German electorate (N>19,500). The electorate is divided, with a slight plurality opposing tuition. Providing information on the university earnings premium raises support for tuition by 7 percentage points, turning the plurality in favor. The opposition-reducing effect persists two weeks after treatment. Information on fiscal costs and unequal access does not affect public preferences. Designing tuition as deferred income-contingent payments raises support by 16 percentage points, creating a strong majority favoring tuition. The same effect emerges when framed as loan payments. Support decreases with higher tuition levels and increases when targeted at non-EU students.

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  • Philipp Lergetporer & Ludger Woessmann, 2019. "The political economy of higher education finance: how information and design affect public preferences for tuition," CESifo Working Paper Series 7536, CESifo.
    • Handle: RePEc:ces:ceswps:_7536
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    Cited by:

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    6. Cattaneo, Maria & Lergetporer, Philipp & Schwerdt, Guido & Werner, Katharina & Woessmann, Ludger & Wolter, Stefan C., 2020. "Information provision and preferences for education spending: Evidence from representative survey experiments in three countries," European Journal of Political Economy, Elsevier, vol. 63(C).
    7. Pamela Giustinelli, 2022. "Expectations in Education: Framework, Elicitation, and Evidence," Working Papers 2022-026, Human Capital and Economic Opportunity Working Group.
    8. Philipp Lergetporer & Katharina Werner & Ludger Woessmann, 2021. "Does Ignorance of Economic Returns and Costs Explain the Educational Aspiration Gap? Representative Evidence from Adults and Adolescents," Economica, London School of Economics and Political Science, vol. 88(351), pages 624-670, July.
    9. Del Rey, Elena & Lopez-Garcia, Miguel-Angel, 2020. "On government-created credit markets for education and endogenous growth," Economic Modelling, Elsevier, vol. 92(C), pages 170-179.
    10. Hügle, Dominik, 2021. "The decision to enrol in higher education," Discussion Papers 2021/8, Free University Berlin, School of Business & Economics.

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    More about this item

    Keywords

    tuition; higher education; political economy; survey experiments; information; earnings premium; income-contingent loans; voting;
    All these keywords.

    JEL classification:

    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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