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The Political Economy of Higher Education Finance: How Information and Design Affect Public Preferences for Tuition

Author

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  • Lergetporer, Philipp

    (ifo Institute at the University of Munich; CESifo)

  • Woessmann, Ludger

    (: University of Munich and ifo Institute; CESifo, IZA, and CAGE)

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 asloan payments. Support decreases with higher tuition levels and increases when targeted at non-EU students.

Suggested Citation

  • Lergetporer, Philipp & Woessmann, Ludger, 2019. "The Political Economy of Higher Education Finance: How Information and Design Affect Public Preferences for Tuition," CAGE Online Working Paper Series 405, Competitive Advantage in the Global Economy (CAGE).
    • Handle: RePEc:cge:wacage:405
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    Cited by:

    1. Lergetporer, Philipp & Werner, Katharina & Woessmann, Ludger, 2020. "Educational inequality and public policy preferences: Evidence from representative survey experiments," Journal of Public Economics, Elsevier, vol. 188(C).
    2. 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.
    3. Hügle, Dominik, 2020. "Higher education funding in Germany: A distributional lifetime perspective," Discussion Papers 2021/1, Free University Berlin, School of Business & Economics.
    4. 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).
    5. Adams-Prassl, A. & Boneva, T. & Golin, M. & Rauh, C., 2021. "The Value of Sick Pay," Cambridge Working Papers in Economics 2162, Faculty of Economics, University of Cambridge.

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    More about this item

    Keywords

    tuition; higher education; political economy; survey experiments; information; earnings premium; income-contingent loans; voting JEL Classification: I22; H52; D72; D83;
    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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