@techreport{Dur2005Subsidizing,
abstract = {We explain why means-tested college tuition and means-tested government grants to college
students can be efficient. The critical idea is that attending college is both an investment good
and a consumption good. If education has a consumption benefit and tuition is uniform, the
marginal rich student is less smart than some poor people who choose not to attend college,
thus reducing the social returns to education and increasing the college?s cost of education.
We find that competition among profit-maximizing colleges results in means-tested tuition. In
addition, to maximize the social returns to education government should means-test grants.
We thus provide a rationale for means-tested tuition and grants which relies neither on capital
market imperfections nor on redistributive objectives.},
author = {Robert A. J. Dur and Amihai Glazer},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {I2; H52; 330; tuition policy; education subsidies; self-selection; Bildungsfinanzierung; Bildungsinvestition; Bildungs\"{o}konomik},
language = {eng},
number = {1560},
title = {Subsidizing enjoyable education},
type = {CESifo working papers},
url = {http://hdl.handle.net/10419/19024},
year = {2005}
}
