The political economy of higher education admission standards and participation gap

Philippe De Donder and Francisco Martínez-Mora

Journal of Public Economics, 2017, vol. 154, issue C, 1-9

Abstract: We build a political economy model allowing us 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.

Keywords: Majority voting; Ends-against-the-middle equilibrium; Non-single-peaked preferences; Non-single-crossing preferences; Higher education participation gap; Size of university; Skill premium (search for similar items in EconPapers)
JEL-codes: D72 I22 (search for similar items in EconPapers)
Date: 2017
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Working Paper: The Political Economy of Higher Education Admission Standards and Participation Gap (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:154:y:2017:i:c:p:1-9

DOI: 10.1016/j.jpubeco.2017.07.004

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