The Political Economy of Higher Education Finance: How Information and Design Affect Public Preferences for Tuition

68 Pages Posted: 21 May 2019

See all articles by Philipp Lergetporer

Philipp Lergetporer

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute

Ludger Woessmann

Ifo Institute for Economic Research; Institute for the Study of Labor (IZA); CESifo (Center for Economic Studies and Ifo Institute for Economic Research); University of Munich - Ifo Institute for Economic Research

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Abstract

Public preferences for charging tuition are important for determining higher education finance. To test whether public support for tuition depends on information and design, we devise several survey experiments in representative samples of the German electorate (N>19,500). The electorate is divided, with a slight plurality opposing tuition. Providing information on the university earnings premium raises support for tuition by 7 percentage points, turning the plurality in favor. The opposition-reducing effect persists two weeks after treatment. Information on fiscal costs and unequal access does not affect public preferences. Designing tuition as deferred income-contingent payments raises support by 16 percentage points, creating a strong majority favoring tuition. The same effect emerges when framed as loan payments. Support decreases with higher tuition levels and increases when targeted at non-EU students.

Keywords: tuition, higher education, political economy, survey experiments, information, earnings premium, income-contingent loans, voting

JEL Classification: I22, H52, D72, D83

Suggested Citation

Lergetporer, Philipp and Woessmann, Ludger, The Political Economy of Higher Education Finance: How Information and Design Affect Public Preferences for Tuition. IZA Discussion Paper No. 12175, Available at SSRN: https://ssrn.com/abstract=3390162

Philipp Lergetporer (Contact Author)

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

Dresden Branch
Einsteinstra├če 3
Dresden, 01069
Germany

Ludger Woessmann

Ifo Institute for Economic Research ( email )

Poschingerstr. 5
Munich
Germany
++49 89 9224 1699 (Phone)
++49 89 9224 1460 (Fax)

HOME PAGE: http://www.cesifo.de/link/woessmann_l.htm

Institute for the Study of Labor (IZA)

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CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

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Munich, DE-81679
Germany

University of Munich - Ifo Institute for Economic Research

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Munich, 80539
Germany

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