Redistribution and Subsidies for Higher Education

21 Pages Posted: 27 Oct 1999

See all articles by Carmen Bevia

Carmen Bevia

Universidad de Alicante

Inigo Iturbe-Ormaetxe

Universidad de Alicante - Department of Economic Analysis

Multiple version iconThere are 2 versions of this paper

Date Written: September 1999

Abstract

The financing of higher education through public spending imposes a transfer of resources from taxpayers (whether or not they are users of the educational services) to the university students ans their parents. Furthermore, most of these students come from middle and upper income groups, who are, therefore, the chief recipients of such transfers of purchasing power. We provide a simple explanation for this phenomenon. We already know that the individuals who attend higher education will earn a higher level of income in the future and, as such, will pay more taxes. People whose children do not attend higher education, howevershould agree to help pay the cost of such education, providing that the taxes are sufficiently high to ensure that there will be an adequate redistribution in favor of their own children at some time in the future.

JEL Classification: D7, H2, I2

Suggested Citation

Bevia, Carmen and Iturbe-Ormaetxe, Inigo, Redistribution and Subsidies for Higher Education (September 1999). Available at SSRN: https://ssrn.com/abstract=185989 or http://dx.doi.org/10.2139/ssrn.185989

Carmen Bevia

Universidad de Alicante ( email )

Campus de San Vicente, sn
Alicante, 03690
Spain

Inigo Iturbe-Ormaetxe (Contact Author)

Universidad de Alicante - Department of Economic Analysis ( email )

03080 Alicante
Spain
965903400 ext. 3227 (Phone)
965903898 (Fax)

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