Phases of Higher Education, Tuition Grants, and Equity-Efficiency Tradeoff

Yoseph Getachew ()
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Yoseph Getachew: University of Pretoria

No 78, ERSA Working Paper Series from Economic Research Southern Africa

Abstract: We study how taxes and alternative higher education subsidies affect equity-efficiency trade-off for countries at different phases of higher education development. We find a scholarship program is the most efficient higher-education-subsidy program at all stages of higher education development due to its highly regressive nature. Laissez-faire (no-government subsidy) Lorenz dominates universal grant in the early stages of development; vice versa, in the later stages of development. Higher education subsidy could thus be regressive in developing countries but progressive in advanced economies. We also find, at the later stages of higher education development, enrollment rate increases in universal subsidy but decreases in other policies, implying the recent shift away from universal grant scheme in the UK could lead to a decline in the enrollment rate.

Keywords: Education subsidy; equity; phases of higher education (search for similar items in EconPapers)
JEL-codes: C31 D21 H2 I2 O4 Q4 R21 (search for similar items in EconPapers)
Date: 2024-09
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Published in ERSA Working Paper Series, September 2024

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