Deferred and Income‐contingent Tuition Fees: An Empirical Assessment using Belgian, German and UK Data

Vandenberghe, Vincent; Debande, Olivier

doi:10.1080/09645290701409889

Cited by 17 publications

(11 citation statements)

References 10 publications

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“…With respect to the interest rate, the central scenario of a nominal annual interest rate of 4 percent is in line with existing literature (e.g. Vandenberghe and Debande, 2007).…”

Section: A Preliminary Economic Assessmentsupporting

confidence: 87%

“…One reason that despite conceptual appeal a pure graduate tax has nowhere been implemented (Asplund et al, 2008) is that high earners would 'repay' a total amount vastly exceeding the cost of their own instruction. Apart from increasing the risk of adverse selection, even if such a significant income transfer is deemed desirable it should be pursued within the scope of an explicit income policy, not implicitly through HE funding (Vandenberghe and Debande, 2007). Indeed, theoretical results suggest that 'pursuing redistributive goals using education policies is bound to have a substantial cost in terms of the sub-optimality of the education policy' (Fraja, 2002).…”

Section: Moderately Progressive Redistributionmentioning

confidence: 99%

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Time is Money: Disentangling Higher Education Cost-Sharing and Commodification Through Deferred Graduate Retirement

Barakat

2017

High Educ Policy

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Current higher education policy debates in Europe are increasingly focusing on raising the share of private funding. To date, policy proposals have centred on a relatively small number of alternatives, namely full public funding, tuition fees, either up-front or delayed and income-contingent, or a surtax on graduate incomes. Here, I present an alternative that, to my knowledge, has not been suggested previously, but sidesteps some important objections against other forms of private contributions. The basic idea explored here is to increase the statutory retirement age for higher education graduates relative to nongraduates. In principle, the resulting decrease in future public pension liabilities can be converted into increased funds for present spending on higher education. In this first discussion of the above proposal I consider important caveats, perform an order-ofmagnitude estimate of whether the financial implications of Deferred Graduate Retirement (DGR) are comparable to those of tuition fees, and discuss advantages and disadvantages compared to more established policy options. I conclude that, at least in the continental European context, DGR promises a number of economically and politically desirable properties compared to established alternatives, and deserves more serious investigation. Keywordshigher education, fees, funding, access, retirement within a framework of endogeneous decisions regarding labour supply, for example. But also in that such a limited view ignores real-life cognitive and behavioural effects. In relation to HE participation, manifest behaviour is well-documented to deviate from strictly economic rationality. This has been noted with respect to mobility (Wakeling and Jefferies, 2013), take-up of financial aid or the repayment schedule of student debt (Chowdry et al., 2012), and the 'haphazard post-secondary choice process' in general (Scott-Clayton, 2013, 75). In his study of decision-making among HE applicants, Usher (2010) found 'there was not a single case of a student being able to show in concrete terms that they had appraised their chosen HE options in terms of both costs and benefits' (p 69). Policy-making with respect to HE funding is likewise 'less the result of rational analyses and more the outcome of negotiation among stakeholders with competing interests' (Marcucci, 2013, 9). It matters how issues are framed, communicated, and justified (Usher, 2010). Accordingly, policies that are equivalent in accounting terms can interact quite differently with perceptions, attitudes, and actual participation decisions.Naturally, there is no empirical evidence yet on how prospective HE entrants perceive and respond to the idea of DGR. However, given well-known general cognitive biases (e.g.'sticker price shock', or 'hyperbolic discounting') it seems highly likely that DGR will have a different effect on HE participation behaviour than fees or a graduate tax. To make the case why DGR might actually be preferable, it is therefore necessary to discuss the issue in terms of HE polic...

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“…With respect to the interest rate, the central scenario of a nominal annual interest rate of 4 percent is in line with existing literature (e.g. Vandenberghe and Debande, 2007).…”

Section: A Preliminary Economic Assessmentsupporting

confidence: 87%

Section: Moderately Progressive Redistributionmentioning

confidence: 99%

Time is Money: Disentangling Higher Education Cost-Sharing and Commodification Through Deferred Graduate Retirement

Barakat

2017

High Educ Policy

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“…Recent empirical evidence suggests that income-contingent loans might be a preferable approach to obtaining greater resources for HE in Europe (e.g. e.g., Chapman and Ryan, 2005;Vandenberghe and Debande, 2007;Courtioux, 2012). iments on the effect of tuition fees on participation decisions.…”

Section: Financing Higher Education 23mentioning

confidence: 99%

R&D subsidies and productivity in SMEs

Karhunen

Huovari

2015

Small Bus Econ

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This dissertation consists of an introductory chapter and four separate empirical studies which study higher education and productivity in Finland. Introductory chapter presents shortly the motivation, background and main results of this thesis. First three articles focus on the relationship between working while studying, dropout behavior and later labor market outcomes at individual level. Fourth article examines how subsidies affect labor productivity at the firm level.The first article of this thesis studies how working while studying relates to earnings after graduation from university or polytechnic. Analysis focuses on working while studying and earnings over two year period after graduation. The results show that early work experience is related to higher earnings right after graduation year, but instrumental variable estimations find no significant causal effect for university students.The second article explores on the relationship between working while studying and migration. Migration propensities are studied up to three years after graduation. Results show that working while studying can partly explain why the mobility of highly educated people has declined. We find that that there are differences by study region and earlier migration behavior.The third article examines the relationship between the decision to drop out from university and labor market outcomes. Results indicate that compared to similar university graduates, the dropouts' annual earnings are on average 11,000 euros lower four years after the dropout decision. Dropouts have also a higher probability of being self-employed than similar graduates.The fourth article examines the effect of R&D subsidies on labour productivity. Study uses firm-level data on Finnish SMEs from 2000 to 2012 and apply a combined matching and difference-in-differences method to control for selection bias. Study does not find significant positive effect on labour productivity over the five-year period after a subsidy is granted.

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“…15 En toute rigueur, il conviendrait de distinguer le relèvement du minerval de mécanismes plus complexes et intrinsèquement plus efficaces et plus équitables : les prêts étudiants dont le remboursement est contingent au revenu du diplômé. Le lecteur intéressé par cette discussion lira Vandenberghe et Debande (2006 ou Hindriks, Van Parijs et Vandenberghe (2003).…”

Section: Des Chèques éQuitablesunclassified

Numéro 54 - septembre 2007

Gérard¹,

Vandenberghe²

2018

Regards économiques

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L'intégration européenne engendre une mobilité asymétrique des étudiants, à l’image du cas emblématique de ces nombreux étudiants français inscrits dans l’enseignement supérieur paramédical en Communauté française. Cette mobilité ébranle le modèle actuel de financement public de l’enseignement supérieur en Communauté française et ailleurs en Europe. Si la présence de quelques étudiants en provenance de l’étranger est sans conséquences et comporte peu d’enjeux, leur afflux génère des stratégies protectionnistes, tels que des quotas. Compréhensibles du point de vue des responsables locaux, c’est-à-dire nationaux, régionaux ou communautaires, ces stratégies ne sont pas pour autant optimales. Elles peuvent conduire à une réduction de la mobilité intra-européenne et des bénéfices que l’on en attend. Ces réponses protectionnistes entravent aussi la constitution de pôles européens de l’enseignement supérieur, recrutant au-delà des frontières régionales et nationales. L'afflux d'étudiants étrangers chez nous suggère que l'ensemble Wallonie-Bruxelles dispose peut-être d’un avantage comparatif au niveau des industries de la connaissance, pouvant conduire à la création de nombreux emplois de qualité. Toute séduisante qu’elle soit, cette perspective reste totalement illusoire dans un système de quotas ! Des alternatives aux quotas, plus efficaces et plus équitables, existent cependant. Elles n’impliquent ni le recours à un financement par l’impôt européen ni à une augmentation de la contribution privée au coût des études. Plus simplement, il s’agit de réorienter les budgets publics actuellement consacrés à l’enseignement supérieur : plutôt que de financer les institutions d’enseignement supérieur situées sur leur territoire, les pouvoirs publics devraient financer les frais d’études de leurs ressortissants via des chèques-études. Ces chèques pourraient être utilisés dans toute institution d’enseignement reconnue par la Communauté française située ou non sur son territoire. En dehors de son territoire, il pourrait s’agir d’institutions reconnues par les juridictions partenaires ou bénéficiant de labels internationaux bien établis. L’apparition de droits d’inscription proportionnels au coût réel des études serait automatiquement compensée par la réception d’un chèque d’un montant équivalent, émis par les pouvoirs publics. De façon symétrique les étudiants français, grecs, luxembourgeois… viendraient se former chez nous, mais aux frais de leurs ressources. Ils paieraient un prix en lien avec le coût réel des études et bénéficieraient éventuellement d’un chèque de leur gouvernement qui, en même temps qu’il les financerait, en tout ou en partie, signalerait la qualité de ces études en Belgique francophone.

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Deferred and Income‐contingent Tuition Fees: An Empirical Assessment using Belgian, German and UK Data

Cited by 17 publications

References 10 publications

Time is Money: Disentangling Higher Education Cost-Sharing and Commodification Through Deferred Graduate Retirement

Time is Money: Disentangling Higher Education Cost-Sharing and Commodification Through Deferred Graduate Retirement

R&D subsidies and productivity in SMEs

Numéro 54 - septembre 2007

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