Subsidizing Enjoyable Education

Robert Dur and Amihai Glazer

No 05-010/1, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: College education is not only an investment; for many people it also generates consumption benefits. If these benefits are normal goods, then the rich attend college at higher rates than the poor. Furthermore, the marginal poor student is smarter than the marginal rich student. Colleges aiming to attract smart students may therefore charge lower tuition to poorer students, even when the colleges lack market power. Moreover, when the social return to education exceeds the private return, allocative efficiency requires government grants to students to be means-tested.

This discussion paper has resulted in an article in 'Labour Economics' , 2008, vol. 15(5) 1023-39.

Keywords: tuition policy; education subsidies; self-selection (search for similar items in EconPapers)
JEL-codes: H52 I2 (search for similar items in EconPapers)
Date: 2005-01-21, Revised 2007-08-29
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Related works:
Journal Article: Subsidizing Enjoyable Education (2008)
Working Paper: Subsidizing Enjoyable Education (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20050010

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