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Financing higher education: a contributory scheme

Author

Listed:
  • David Flacher

    (CEPN - CNRS (UMR 7234) Université Paris 13)

  • Hugo Harari-Kermadec

    (IDHE - CNRS (UMR 8533) ENS Cachan)

  • Léonard Moulin

    (CEPN - CNRS (UMR 7234) Université Paris 13)

Abstract

In this paper, we study the higher education financing based on the classical contributory versus self-funded pension funding scheme. We provide a brief discussion of how a system based on student debt can be seen ’funded’ and why it fails to ensure equity and efficiency and funding for the longer term. We also define a contributory financing scheme for higher education based on income tax and social security contributions, and study its strengths and weaknesses. By contributory, we mean a scheme that ensures free access to university, providing for students’ expenses and the costs of research and teaching. We show that such a system would be efficient and equitable, and we discuss under what conditions it would be efficient. We show also that it would prevent polarization in the higher education system. We conclude with an implementation of our contributory financing scheme in the case of France (it increases university funding by €5bn and provides €19bn for students’ expenditure) and illustrate the effect of such a scheme on some typical households.

Suggested Citation

  • David Flacher & Hugo Harari-Kermadec & Léonard Moulin, 2013. "Financing higher education: a contributory scheme," Working Papers 2013/34, Institut d'Economia de Barcelona (IEB).
    • Handle: RePEc:ieb:wpaper:doc2013-34
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Universal Autonomy Allowance; contributory scheme; funded education scheme; financing higher education; equity; efficiency;
    All these keywords.

    JEL classification:

    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality

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