Free Higher Education - Regressive Transfer or Implicit Loan ?
Should access to higher education remain â€˜freeâ€™ ? Theoretical answers to this question are at least twofold. First, public higher education is said to be regressive as a priviliged minority profits from extra human capital, and all the private benefits it generates, while the general public foots the bill. A frequent reply is that higher education students enjoying â€˜freeâ€™ access are implicitly borrowing public money that they pay back when entering the labour market, via progressive income taxes. Using a simple lifecycle framework this paper produces realistic estimates of how much graduates are likely to â€˜reimburseâ€ society via income tax. Using Belgian data on higher education public expenditure and income taxes paid by both graduates and non-graduates over their lifetime, we show that the implicit reimbursement rate ranges from 37% to 95%. It is much higher for bachelors than master graduates, and for males
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- 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.
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"Australian Higher Education Financing: Issues for Reform,"
CEPR Discussion Papers
434, Centre for Economic Policy Research, Research School of Economics, Australian National University.
- 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.
- Michael F. Förster, 2000. "Trends and Driving Factors in Income Distribution and Poverty in the OECD Area," OECD Labour Market and Social Policy Occasional Papers 42, OECD Publishing.
- W. Lee Hansen & Burton A. Weisbrod, 1969. "The Distribution of Costs and Direct Benefits of Public Higher Education: The Case of California," Journal of Human Resources, University of Wisconsin Press, vol. 4(2), pages 176-191.
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