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Educational Federalism and the Quality Effects of Tuition Fees

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  • Alexander Kemnitz

Abstract

This paper investigates how the abolishment of a ban on tuition fees affects the quality of higher education with centralized and decentralized decision making. It is shown that a marginal introduction of tuition fees fully crowds out public funds under centralization, whereas educational quality improves under decentralization. However, if the government has full discretion about the tuition fee level, centralization leads to the efficient quality, fully extracting the income gains from the graduates, while decentralization typically induces inefficiently low spending levels.

Suggested Citation

  • Alexander Kemnitz, 2010. "Educational Federalism and the Quality Effects of Tuition Fees," CESifo Working Paper Series 3193, CESifo.
    • Handle: RePEc:ces:ceswps:_3193
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    Cited by:

    1. Elsayyad, May & Konrad, Kai A., 2012. "Fighting multiple tax havens," Journal of International Economics, Elsevier, vol. 86(2), pages 295-305.
    2. Alexander Haupt & Tim Krieger & Thomas Lange, 2011. "Competition for the International Pool of Talent: Education Policy and Student Mobility," Working Papers CIE 35, Paderborn University, CIE Center for International Economics.
    3. Björn Kauder & Niklas Potrafke, 2013. "Government Ideology and Tuition Fee Policy: Evidence from the German States," CESifo Economic Studies, CESifo Group, vol. 59(4), pages 628-649, December.
    4. Lydia Mechtenberg & Roland Strausz, 2008. "The Bologna process: how student mobility affects multi-cultural skills and educational quality," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 15(2), pages 109-130, April.
    5. Marcel Gerard, 2010. "Financing Bologna Students' Mobility," Taxation Papers 26, Directorate General Taxation and Customs Union, European Commission.
    6. Delpierre, Matthieu & Verheyden, Bertrand, 2014. "Student and worker mobility under university and government competition," Journal of Public Economics, Elsevier, vol. 110(C), pages 26-41.
    7. Tim Krieger & Thomas Lange, 2010. "Education policy and tax competition with imperfect student and labor mobility," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 17(6), pages 587-606, December.
    8. repec:hum:wpaper:sfb649dp2006-018 is not listed on IDEAS
    9. Ehlers, Tim, 2011. "University graduation dependent on family's wealth, ability and social status," University of Göttingen Working Papers in Economics 120, University of Goettingen, Department of Economics.
    10. Silke Übelmesser & Marcel Gérard, 2014. "Financing Higher Education when Students and Graduates are Internationally Mobile," Jena Economics Research Papers 2014-009, Friedrich-Schiller-University Jena.
    11. Marcel Gérard, 2008. "Financing Bologna, the Internationally Mobile Students in European Higher Education," CESifo Working Paper Series 2391, CESifo.
    12. Gabrielle Demange & Robert Fenge & Silke Uebelmesser, 2014. "Financing Higher Education in a Mobile World," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 16(3), pages 343-371, June.
    13. Maria Racionero & Elena Del Rey, 2012. "Choosing the type of income-contingent loan: risk-sharing versus risk-pooling," CEPR Discussion Papers 671, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    14. Hübner, Malte, 2012. "The welfare effects of discriminating between in-state and out-of-state students," Regional Science and Urban Economics, Elsevier, vol. 42(1-2), pages 364-374.
    15. Gabrielle Demange & Robert Fenge & Silke Uebelmesser, 2008. "Financing Higher Education and Labor Mobility," CESifo Working Paper Series 2362, CESifo.
    16. Dwenger, Nadja & Storck, Johanna & Wrohlich, Katharina, 2012. "Do tuition fees affect the mobility of university applicants? Evidence from a natural experiment," Economics of Education Review, Elsevier, vol. 31(1), pages 155-167.
    17. Maria Racionero & Elena Del Rey, 2012. "Choosing the type of income-contingent loan: risk-sharing versus risk-pooling," CEPR Discussion Papers 671, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    18. repec:got:cegedp:120 is not listed on IDEAS
    19. Thomas Lange, 2008. "Local Public Funding of Higher Education when Students and Skilled Workers are Mobile," Working Papers CIE 11, Paderborn University, CIE Center for International Economics.
    20. Georg-Benedikt Fischer & Berthold U. Wigger, 2016. "Fiscal Competition and Higher Education Spending in Germany," German Economic Review, Verein für Socialpolitik, vol. 17(2), pages 234-252, May.

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    More about this item

    Keywords

    higher education; federalism; tuition fees;
    All these keywords.

    JEL classification:

    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid

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