The Distributional Impact of Subsidies to Higher Education – Empirical Evidence from Germany

Abstract

This paper presents empirical evidence on the distributional impact of public higher education through analysis of a cross-sectional view of West Germany in 1997. In contrast to a widely-held hypothesis in economics, our findings do not show evidence for a regressive impact. The use of a net-transfer calculation clearly provides a progressive distributional effect of the benefits from subsidization -at least when viewed in the cross-sectional perspective. The decisive factors are (1) the general social stratification within and among the adjusted income deciles and (2) the incidence of the granted benefits. Complementary to the existing widespread literature in this field, we propose the BCa-bootstrap procedure in order to perform statistical inference.

An equity perspective on access to, enrolment in and finance of tertiary education

“…See further OECD (2001b), Biffl and Isaac (2002), Blöndal et al (2002, Table 6) and Clancy and Goastellec (2007) for an overview of selected country-specific evidence, and e.g. Kivinen et al (2001) for Finland, Barbaro (2003) for Germany, Opheim (2004) for Norway, Holzer (2006) for Sweden, Galindo-Rueda et al (2004) and Machin and Vignoles (2004) for the UK. Similar overall patterns already emerged among the eight European countries that participated in the corresponding survey for the year 2000.…”

“…Barbaro (2003). A recent review of student support in 13 countries reveals that due to the wide use of parental-income-tested financing of higher education, students from low-income families typically receive larger subsidies for the same educational attainment (NCES 2003).…”

Offentliche versus private Finanzierung der Hochschulbildung: Effizienz- und Verteilungsaspekte

“…Daneben existieren Studien aus den 1970er und 1980er Jahren. Mackscheidt (1976) (2001) Deutschland progressiv Umverteilung zu Gunsten unterer Einkommensklassen Barbaro (2003) Deutschland progressiv Umverteilung zu Gunsten unterer (bedarfsgewichteter) Einkommensklassen Sturn und Wohlfahrt (1999) Ö sterreich progressiv Umverteilung zu Gunsten unterer (bedarfsgewichteter) Einkommensklassen Im Querschnitt zeichnen die Arbeiten -bei aller wegen der problematischen methodischen Vergleichbarkeit gebotenen Vorsicht -im Gegensatz zur HansenWeisbrod-Pechman-Debatte ein einheitlicheres Bild. Die Studie von Grüske (1994) untersucht die Inzidenz der öffentlichen Hochschulfinanzierung für Deutschland.…”

“…Im Querschnitt zeigt sich auch im Falle Ö sterreichs ein progressiver Effekt, der unter Verwendung von Ä quivalenzeinkommen stärker ausgeprägt ist. Mit Barbaro (2003) Für den Nettosaldo im Längsschnitt bestimmen Sturn und Wohlfahrt (1999) Lebenseinkommen, Lebenssteuerlast sowie die auf einen Akademiker entfallenen durchschnittlichen Hochschulkosten. Zur Bestimmung der hochschulbezogenen Abgabenlast verwenden sie den Ertragsansatz, wobei die Einnahmenseite in Höhe des so genannten Glättungsvorteils der Nichtakademiker einbezogen wird.…”

A Review of Instruments for Student Loans in Tertiary Education

“…Indeed, the regressive nature (Barr, 2000; 2002) of public subsidies (i.e. taxpayers’ contribution) to finance tertiary education implies a reverse distribution effect, since the incidence of the costs is borne by the average taxpayers whereas the benefits accrue to the most talented (noting that in Belgium and in Germany, recent studies (Barbaro, 2001; Vanbenberghe, 2001) do not find evidence of a regressive impact based on the analysis of the fiscal incidence and on the identification of a fiscal rate of returns to tertiary education (defined as the interest rate equalising the public expenditure for tertiary education and the additional fiscal revenues derived from graduates) that is higher than the private ones, which means that graduates are more than repaying the implicit loan granted to them in a free of use tertiary education system). Considering the potential contribution of graduates, the instruments that could be used are the following: student loans associated with an increase in the tuition fees or a graduate tax.…”