Risky higher education and subsidies

Higher Education Subsidies and Human Capital Mobility Preliminary and Incomplete

In the U.S. there are large di erences across States in the extent to which college education is subsidized, and there are also large di erences across States in the proportion of college graduates in the labor force. State subsidies are apparently motivated in part by the perceived benets of having a more educated workforce. The paper uses the migration model of Kennan and Walker (2009) to ana...

Nearly-efficient tuitions and subsidies in American public higher education

A two-stage setting for determining subsidies and tuitions in a public university context is developed where fixed costs introduce an efficiency-enhancing role for taxpayer-financed appropriations. The optimal subsidy per enrollment is shown to be proportional to students’ maximum net willingness to pay. This result extends a well-known result associated with Ramsey pricing to include endogenou...

Salvatore Barbaro The Distributional Impact of Subsidies to Higher Education –

The Incentive Effects of Higher Education Subsidies on Student Effort

This paper uses a game-theoretic model to analyze the disincentive effects of low-tuition policies on student effort. The model of parent and student responses to tuition subsidies is then calibrated using information from the National Longitudinal Survey of Youth 1979 and the High School and Beyond Sophomore Cohort: 1980-92. I find that although subsidizing tuition increases enrollment rates, ...

Equity vs. Effi ciency in Subsidies to Higher Education

Despite some empirical evidence to the contrary, government subsidies to higher education are usually presumed to be inequitable because college-educated workers earn more than less educated workers. Using a simple model of educational choice with endogenous wages and two worker types, I obtain strong results concerning this conflict between effi ciency and equity —namely that equity and effi c...