Heterogeneous Individuals and the Optimal Level of Higher Education

Ryuhei Okumura and Dapeng Cai

FinanzArchiv: Public Finance Analysis, 2009, vol. 65, issue 1, 37-50

Abstract: We examine the effects of public funding on higher education within a game-theoretical framework, in which universities choose students according to their abilities to learn, whereas to widen the opportunity of receiving higher education, the tuition fees are partially financed by a graduate-tax subsidy system. We find that when individuals are impatient, partial public financing of higher education results in an overinvestment in higher education, which is, however, desirable in terms of improved access.

Keywords: higher education; heterogeneous individuals; graduate tax (search for similar items in EconPapers)
JEL-codes: H24 I23 I28 (search for similar items in EconPapers)
Date: 2009
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DOI: 10.1628/001522108X444189

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