IDEAS home Printed from https://ideas.repec.org/p/isu/genstf/1994010108000012264.html
   My bibliography  Save this paper

States' support of higher education: A theoretical and empirical analysis

Author

Listed:
  • Holtkamp, Janice McClung

Abstract

This dissertation uses public finance theory and econometrics to examine the variation of expenditures on public higher education among states. The basic theory of public goods and externalities combined with comparative static analysis provides the theoretical framework to examine the effect of possible explanatory variables on optimal subsidy levels for public higher education. Two theoretical models are developed, a one sector model of the higher education market that treats private education as independent of the public market, and a two sector model that recognizes the interdependence of the public and private markets for higher education. Cross-sectional regression techniques are then used to determine the relative importance of differences in the explanatory variables on the optimal subsidy levels and to test the usefulness of separating the two higher education markets. One of the most significant findings is that states react to the vested interest they have in educating their citizens. Variables that influence future state government income are consistently significant in determining the optimal per-student public subsidy. This supports the argument that governments' behavior is affected by their equity interest in the educational investment of their citizens. Another significant finding is that state support of private higher education appears to decrease allocations to public higher education.

Suggested Citation

  • Holtkamp, Janice McClung, 1994. "States' support of higher education: A theoretical and empirical analysis," ISU General Staff Papers 1994010108000012264, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genstf:1994010108000012264
    as

    Download full text from publisher

    File URL: https://dr.lib.iastate.edu/server/api/core/bitstreams/981b1149-913a-4eab-a908-b9d722c0bdf3/content
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Parsons, Donald O, 1974. "The Cost of School Time, Foregone Earnings, and Human Capital Formation," Journal of Political Economy, University of Chicago Press, vol. 82(2), pages 251-266, Part I, M.
    2. Lehr, Dona K & Newton, Jan M, 1978. "Time Series and Cross-Sectional Investigations of the Demand for Higher Education," Economic Inquiry, Western Economic Association International, vol. 16(3), pages 411-422, July.
    3. Radner, Roy & Miller, L S, 1970. "Demand and Supply in U. S. Higher Education: A Progress Report," American Economic Review, American Economic Association, vol. 60(2), pages 326-334, May.
    4. Arthur J. Corazzini & Dennis J. Dugan & Henry G. Grabowski, 1972. "Determinants and Distributional Aspects of Enrollment in U.S. Higher Education," Journal of Human Resources, University of Wisconsin Press, vol. 7(1), pages 39-59.
    5. Borus, Michael E. & Carpenter, Susan A., 1984. "Factors associated with college attendance of high-school seniors," Economics of Education Review, Elsevier, vol. 3(3), pages 169-176, June.
    6. Mattila, J. Peter, 1982. "Determinants of Male School Enrollments, A Time-Series Analysis," Staff General Research Papers Archive 10849, Iowa State University, Department of Economics.
    7. Randall G. Holcombe & Lora P. Holcombe, 1984. "The Return To the Federal Government From Investment in Higher Education," Public Finance Review, , vol. 12(3), pages 365-371, July.
    8. Lazear, Edward P, 1977. "Education: Consumption or Production?," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 569-597, June.
    9. Peltzman, Sam, 1973. "The Effect of Government Subsidies-in-Kind on Private Expenditures: The Case of Higher Education," Journal of Political Economy, University of Chicago Press, vol. 81(1), pages 1-27, Jan.-Feb..
    10. Coughlin, Cletus C. & Erekson, O. Homer, 1986. "Determinants of state aid and voluntary support of higher education," Economics of Education Review, Elsevier, vol. 5(2), pages 179-190, April.
    11. Mattila, J Peter, 1982. "Determinants of Male School Enrollments: A Time-Series Analysis," The Review of Economics and Statistics, MIT Press, vol. 64(2), pages 242-251, May.
    12. repec:eee:labchp:v:1:y:1986:i:c:p:357-386 is not listed on IDEAS
    13. Psacharopoulos, George (ed.), 1987. "Economics of Education," Elsevier Monographs, Elsevier, edition 1, number 9780080333793.
    14. Bowles, Samuel, 1972. "Schooling and Inequality from Generation to Generation," Journal of Political Economy, University of Chicago Press, vol. 80(3), pages 219-251, Part II, .
    15. Galper, Harvey & Dunn, Robert M, Jr, 1969. "A Short-Run Demand Function for Higher Education in the United States," Journal of Political Economy, University of Chicago Press, vol. 77(5), pages 765-777, Sept./Oct.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Scott Drylie, 2020. "Professional Scholarship from 1893 to 2020 on Adam Smith’s Views on School Funding: A Heterodox Examination," Econ Journal Watch, Econ Journal Watch, vol. 17(2), pages 350–391-3, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:eee:labchp:v:1:y:1986:i:c:p:357-386 is not listed on IDEAS
    2. Wohlgemuth, Darin Ray, 1993. "Empirical analysis of the demand for higher education, 1966-1990," ISU General Staff Papers 1993010108000018165, Iowa State University, Department of Economics.
    3. Wohlgemuth, Darin Ray, 1997. "Individual and aggregate demand for higher education: the role of strategic scholarships," ISU General Staff Papers 1997010108000012571, Iowa State University, Department of Economics.
    4. Jean Perrot, 1991. "Les dépenses publiques pour l'enseignement universitaire et le taux de rendement fiscal : le cas de la France," Revue Économique, Programme National Persée, vol. 42(1), pages 111-132.
    5. Sophie Korczyk, 1979. "A Model of College Selection," Public Finance Review, , vol. 7(3), pages 368-380, July.
    6. Thompson, Fred & Zumeta, William, 2001. "Effects of key state policies on private colleges and universities: sustaining private-sector capacity in the face of the higher education access challenge," Economics of Education Review, Elsevier, vol. 20(6), pages 517-531, December.
    7. Binder, Melissa, 1999. "Schooling indicators during Mexico's "Lost decade"," Economics of Education Review, Elsevier, vol. 18(2), pages 183-199, April.
    8. Bijan Vasigh & Reza Hamzaee, 2004. "Testing sensitivity of student enrollment with respect to tuition at an institution of higher education," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 10(2), pages 133-149, May.
    9. Havranek, Tomas & Irsova, Zuzana & Zeynalova, Olesia, 2017. "Tuition Reduces Enrollment Less Than Commonly Thought," MPRA Paper 78813, University Library of Munich, Germany.
    10. Liao, Mei, 1984. "The demand for undergraduate education at 4-year institutions in the United States," ISU General Staff Papers 1984010108000017527, Iowa State University, Department of Economics.
    11. Eugenio Bobenrieth & Carlos Cáceres, 1993. "Determinantes del Salario de los Egresados de la Enseñanza Media Técnico Profesional en Chile," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 30(89), pages 111-130.
    12. Petrongolo, Barbara & San Segundo, Maria J., 2002. "Staying-on at school at 16: the impact of labor market conditions in Spain," Economics of Education Review, Elsevier, vol. 21(4), pages 353-365, August.
    13. Bradley, Elizabeth S., 2012. "The Effect of the Business Cycle on Freshman Major Choice," MPRA Paper 42412, University Library of Munich, Germany.
    14. Luis Eduardo Arango & Paula Herrera & Carlos Esteban Posada, 2008. "El salario mínimo: aspectos generales sobre los casos de Colombia y otros países," Revista ESPE - Ensayos Sobre Política Económica, Banco de la República, vol. 26(56), pages 204-263, June.
    15. Lemelin, Clément & Perrot, Jean, 1990. "Les dépenses publiques pour l’enseignement universitaire et le taux de rendement fiscal : le cas du Québec," L'Actualité Economique, Société Canadienne de Science Economique, vol. 66(2), pages 193-217, juin.
    16. Brotherhood, Luiz & Delalibera, Bruno R., 2020. "Minding the gap between schools and universities," Journal of Economic Dynamics and Control, Elsevier, vol. 120(C).
    17. Sadaba, Barbara & Vujić, Sunčica & Maier, Sofia, 2024. "Characterizing the schooling cycle," Economic Modelling, Elsevier, vol. 132(C).
    18. Raquel Fernandez & Richard Rogerson, 1995. "On the Political Economy of Education Subsidies," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 62(2), pages 249-262.
    19. Gary S. Becker & Nigel Tomes, 1994. "Human Capital and the Rise and Fall of Families," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, Third Edition, pages 257-298, National Bureau of Economic Research, Inc.
    20. Schmidt, Alejandro & Ortúzar, Juan de Dios & Paredes, Ricardo D., 2019. "Heterogeneity and college choice: Latent class modelling for improved policy making," Journal of choice modelling, Elsevier, vol. 33(C).
    21. Smith, Alexander A., 2021. "The minimum wage and teen educational attainment," Labour Economics, Elsevier, vol. 73(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:isu:genstf:1994010108000012264. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Curtis Balmer (email available below). General contact details of provider: https://edirc.repec.org/data/deiasus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.