Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/61002
Authors: 
Borck, Rainald
Uebelmesser, Silke
Wimbersky, Martin
Year of Publication: 
2012
Series/Report no.: 
CESifo Working Paper: Public Finance 3877
Abstract: 
We study voting over higher education finance in an economy with two regions and two separated labor markets. Households differ in their financial endowment and their children's ability. Non-students are immobile. Students decide where to study; they return home after graduation with exogenous probability. The voters of the two regions decide on whether to subsidize higher education costs or whether to rely on tuition fees only. We find that in equilibrium, in both regions a majority votes for subsidies when the return probability is sufficiently small. When that probability is large, both regions opt for full tuition finance. Interestingly, the higher the return probability, the smaller are the equilibrium subsidy rates, but the larger are the numbers of exchange students.
Subjects: 
voting
higher education
financing scheme
mobility
JEL: 
H52
H42
D72
Document Type: 
Working Paper

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