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The Political Economy of Higher Education Admission Standards and Participation Gap

Listed author(s):
  • Philippe De Donder

    ()

  • Francisco Martinez-Mora

    ()

We build a political economy model in order to shed light on the empirically observed simultaneous increase in university size and participation gap. Parents differ in income and in the ability of their unique child. They vote over the minimum ability level required to attend public universities, which are tuition-free and financed by proportional income taxation. Parents can invest in private tutoring to help their child pass the admission test. A university participation gap emerges endogenously with richer parents investing more in tutoring. A unique majority voting equilibrium exists, which can be either classical or “ends-against-the-middle” (in which case parents of both low- and high-ability children favor a smaller university). Four factors increase the university size (larger skill premium enjoyed by university graduates, smaller tutoring costs, smaller university cost per student, larger minimum ability of students), but only the former two also increase the participation gap. A more unequal parental income distribution also increases the participation gap, but barely affects the university size.

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File URL: http://www.le.ac.uk/economics/research/repec/lec/leecon/dp17-11.pdf
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Paper provided by Department of Economics, University of Leicester in its series Discussion Papers in Economics with number 17/11.

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Date of creation: Mar 2017
Handle: RePEc:lec:leecon:17/11
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Department of Economics University of Leicester, University Road. Leicester. LE1 7RH. UK

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  1. Philippe De Donder & Francisco Martinez-Mora, 2015. "On the Political Economy of University Admission Standards," Discussion Papers in Economics 15/11, Department of Economics, University of Leicester.
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  9. Bray, Mark & Kwok, Percy, 2003. "Demand for private supplementary tutoring: conceptual considerations, and socio-economic patterns in Hong Kong," Economics of Education Review, Elsevier, vol. 22(6), pages 611-620, December.
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  11. Elena Del Rey & María Racionero, 2012. "Voting On Income‐Contingent Loans For Higher Education," The Economic Record, The Economic Society of Australia, vol. 88(s1), pages 38-50, 06.
  12. Antonio Di Paolo, 2012. "Parental Education And Family Characteristics: Educational Opportunities Across Cohorts In Italy And Spain," Revista de Economia Aplicada, Universidad de Zaragoza, Departamento de Estructura Economica y Economia Publica, vol. 20(1), pages 119-146, Spring.
  13. Pedro Carneiro & Sokbae Lee, 2011. "Trends in Quality-Adjusted Skill Premia in the United States, 1960-2000," American Economic Review, American Economic Association, vol. 101(6), pages 2309-2349, October.
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  15. Chao Fu, 2014. "Equilibrium Tuition, Applications, Admissions, and Enrollment in the College Market," Journal of Political Economy, University of Chicago Press, vol. 122(2), pages 225-281.
  16. Abhijit V. Banerjee & Shawn Cole & Esther Duflo & Leigh Linden, 2007. "Remedying Education: Evidence from Two Randomized Experiments in India," The Quarterly Journal of Economics, Oxford University Press, vol. 122(3), pages 1235-1264.
  17. Acemoglu, Daron & Pischke, J. -S., 2001. "Changes in the wage structure, family income, and children's education," European Economic Review, Elsevier, vol. 45(4-6), pages 890-904, May.
  18. Checchi, Daniele & Fiorio, Carlo V. & Leonardi, Marco, 2013. "Intergenerational persistence of educational attainment in Italy," Economics Letters, Elsevier, vol. 118(1), pages 229-232.
  19. De Fraja, Gianni & Valbonesi, Paola, 2012. "The design of the university system," Journal of Public Economics, Elsevier, vol. 96(3), pages 317-330.
  20. Daron Acemoglu, 2003. "Patterns of Skill Premia," Review of Economic Studies, Oxford University Press, vol. 70(2), pages 199-230.
  21. Epple, Dennis & Romano, Richard E., 1996. "Ends against the middle: Determining public service provision when there are private alternatives," Journal of Public Economics, Elsevier, vol. 62(3), pages 297-325, November.
  22. De Fraja, Gianni, 2001. "Education Policies: Equity, Efficiency and Voting Equilibrium," Economic Journal, Royal Economic Society, vol. 111(471), pages 104-119, May.
  23. Buly A. Cardak & Chris Ryan, 2009. "Participation in Higher Education in Australia: Equity and Access," The Economic Record, The Economic Society of Australia, vol. 85(271), pages 433-448, December.
  24. Stephen V. Cameron & James J. Heckman, 2001. "The Dynamics of Educational Attainment for Black, Hispanic, and White Males," Journal of Political Economy, University of Chicago Press, vol. 109(3), pages 455-499, June.
  25. David Greenaway & Michelle Haynes, 2003. "Funding Higher Education in The UK: The Role of Fees and Loans," Economic Journal, Royal Economic Society, vol. 113(485), pages 150-166, February.
  26. Francesco Vona, 2011. "Does the Expansion of Higher Education Reduce Educational Inequality? Evidence from 12 European Countries," Documents de Travail de l'OFCE 2011-12, Observatoire Francais des Conjonctures Economiques (OFCE).
  27. Raquel Fernandez & Richard Rogerson, 1995. "On the Political Economy of Education Subsidies," Review of Economic Studies, Oxford University Press, vol. 62(2), pages 249-262.
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