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Higher education funding in Germany: A distributional lifetime perspective

Dominik Hügle

No 2021/1, Discussion Papers from Free University Berlin, School of Business & Economics

Abstract: This paper analyzes higher education funding in Germany from a distributional perspective. For this, I first compare the quantitative importance of different funding instruments, from free tuition to subsidized health insurance for students. I show that free tuition is, by far, the most important instrument. Then, I take a lifetime perspective and assess how individuals of different expected lifetime incomes benefit from higher education funding. I distinguish between different fields of study as there are large differences in both the expected lifetime earnings of graduating from a specific field and the social cost of tuition associated with each field. Finally, I focus exclusively on the instrument of subsidized tuition and simulate the introduction of different tuition fee schemes with income-contingent loans. While the distributional effects would be sizable in absolute terms, I estimate that they would cause few individuals to change their educational decisions.

Keywords: Higher education; Education finance; Dynamic microsimulation (search for similar items in EconPapers)
JEL-codes: C53 I22 I23 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-edu and nep-eur
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