The Evolution of Public Spending on Higher Education in a Democracy

32 Pages Posted: 18 Jan 2006

See all articles by Alexander Haupt

Alexander Haupt

University of Plymouth - Plymouth Business School; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: December 2005

Abstract

This paper analyses political forces that cause an initial expansion of public spending on higher education and an ensuing decline in subsidies. Growing public expenditures increase the future size of the higher income class and thus boost future demand for education. This demand shift implies that the initial subsidy per student becomes too expensive to be politically sustainable. Despite a voters' backlash that curbs education subsidies, overall enrolments continue to rise. But the participation rate of the children of lower income families, which went up in the expansion period, declines over time, both in absolute terms and relative to the rate of their counterparts from higher income households.

Keywords: higher education, voting, social stratification, social mobility, overlapping generations

JEL Classification: I22, I28, D72, H52, O15

Suggested Citation

Haupt, Alexander, The Evolution of Public Spending on Higher Education in a Democracy (December 2005). CESifo Working Paper Series No. 1631. Available at SSRN: https://ssrn.com/abstract=876548

Alexander Haupt (Contact Author)

University of Plymouth - Plymouth Business School ( email )

Mast House
Plymouth, Devon PL4 8AA
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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