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The Political Economy of Higher Education Admission Standards and Participation Gap

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  • Philippe De Donder

    ()

  • Francisco Martinez-Mora

    ()

Abstract

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.

Suggested Citation

  • Philippe De Donder & Francisco Martinez-Mora, 2017. "The Political Economy of Higher Education Admission Standards and Participation Gap," Discussion Papers in Economics 17/11, Department of Economics, University of Leicester.
  • Handle: RePEc:lec:leecon:17/11
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    majority voting; ends-against-the-middle equilibrium; non single-peaked;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid

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