The Political Economics of Higher Education Finance for Mobile Individuals

Rainald Borck, Silke Uebelmesser and Martin Wimbersky

No 3877, CESifo Working Paper Series from CESifo

Abstract: We study voting over higher education finance in an economy with two regions and two separated labor markets. Households differ in their financial endowment and their children’s ability. Non-students are immobile. Students decide where to study; they return home after graduation with exogenous probability. The voters of the two regions decide on whether to subsidize higher education costs or whether to rely on tuition fees only. We find that in equilibrium, in both regions a majority votes for subsidies when the return probability is sufficiently small. When that probability is large, both regions opt for full tuition finance. Interestingly, the higher the return probability, the smaller are the equilibrium subsidy rates, but the larger are the numbers of exchange students.

Keywords: voting; higher education; financing scheme; mobility (search for similar items in EconPapers)
JEL-codes: D72 H42 H52 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: The Political Economics of Higher-Education Finance for Mobile Individuals (2015)
Working Paper: The Political Economics of Higher Education Finance for Mobile Individuals (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_3877

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