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Public funding of Higher Education: who gains, who loses?

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  • Ana Balcao Reis

Abstract

This paper analyses the efects of public funding of higher education on the welfare of the diferent agents. It takes into account the hierarchical nature of the educational system and also the fact that parents always have the possibility to complement basic public education with private expenditures in individual tutoring. It is obtained that although public funding implies a larger access to higher education it is always the case that some of the agents that gain access lose in welfare terms. Moreover, it is shown that the marginal agent to access university would always prefer a pure private funding system. Thus, when studying the e¤ects of public funding of higher education, we can not identify gaining access to University with an increase in welfare. Finally, I consider a funding system where only those that send their o¤spring to university support the funding of higher education.

Suggested Citation

  • Ana Balcao Reis, 2011. "Public funding of Higher Education: who gains, who loses?," FEUNL Working Paper Series wp553, Universidade Nova de Lisboa, Faculdade de Economia.
  • Handle: RePEc:unl:unlfep:wp553
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    File URL: http://fesrvsd.fe.unl.pt/WPFEUNL/WP2011/Wp553.pdf
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    References listed on IDEAS

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    1. Pedro Carneiro & James J. Heckman, 2002. "The Evidence on Credit Constraints in Post--secondary Schooling," Economic Journal, Royal Economic Society, vol. 112(482), pages 705-734, October.
    2. Glomm, Gerhard & Ravikumar, B., 2003. "Public education and income inequality," European Journal of Political Economy, Elsevier, vol. 19(2), pages 289-300, June.
    3. Gianni de Fraja, 2002. "The Design of Optimal Education Policies," Review of Economic Studies, Oxford University Press, vol. 69(2), pages 437-466.
    4. de la Croix, David & Doepke, Matthias, 2004. "Public versus private education when differential fertility matters," Journal of Development Economics, Elsevier, vol. 73(2), pages 607-629, April.
    5. Carneiro, Pedro & Heckman, James J., 2003. "Human Capital Policy," IZA Discussion Papers 821, Institute for the Study of Labor (IZA).
    6. Epple, Dennis & Romano, Richard E, 1996. "Public Provision of Private Goods," Journal of Political Economy, University of Chicago Press, vol. 104(1), pages 57-84, February.
    7. Oded Galor & Joseph Zeira, 1993. "Income Distribution and Macroeconomics," Review of Economic Studies, Oxford University Press, vol. 60(1), pages 35-52.
    8. Glomm, Gerhard & Ravikumar, B, 1992. "Public versus Private Investment in Human Capital Endogenous Growth and Income Inequality," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 818-834, August.
    9. Su, Xuejuan, 2004. "The allocation of public funds in a hierarchical educational system," Journal of Economic Dynamics and Control, Elsevier, vol. 28(12), pages 2485-2510, December.
    10. Epple, Dennis & Romano, Richard E, 1998. "Competition between Private and Public Schools, Vouchers, and Peer-Group Effects," American Economic Review, American Economic Association, vol. 88(1), pages 33-62, March.
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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Who gains from public higher education?
      by Economic Logician in Economic Logic on 2011-05-09 19:19:00

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    Cited by:

    1. Debora Di Gioacchino & Laura Sabani & Simone Tedeschi, 2016. "Differences in education systems across OECD countries: the role of education policy preferences in a hierarchical system," Working Papers 177, University of Rome La Sapienza, Department of Public Economics.

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    Keywords

    higher education; public funding;

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