Fiscal Competition and Higher Education Spending in Germany

The present paper studies the determinants of higher education spending by the German federal states with a focus on the interplay between higher education spending of neighboring states. More specifically, the paper asks whether the German federal states free‐ride on one another's higher educational spending or whether they employ higher education spending to attract university graduates. We identify a positive relationship between the states' higher education spending and conclude that the states compete for graduates rather than free‐ride. We also consider the effect of the recent introduction of tuition fees in some, but not all German states. We do not find evidence that tuition fees led to crowding out of public higher education funds.     

Price Discrimination in Public Healthcare

Could a public healthcare system use price discrimination—paying medical service providers different fees, depending on the service provider's quality—lead to improvements in social welfare? We show that differentiating medical fees by quality increases social welfare relative to uniform pricing (i.e. quality‐invariant fee schedules) whenever hospitals and doctors have private information about their own ability. We also show that by moving from uniform to differentiated medical fees, the public healthcare system can effectively incentivise good doctors and hospitals (i.e. low‐cost‐types) to provide even higher levels of quality than they would under complete information. In the socially optimal quality‐differentiated medical fee system, low‐cost‐type medical‐service providers enjoy a rent due to their informational advantage. Informational rent is socially beneficial because it gives service providers a strong incentive to invest in the extra training required to deliver high‐quality services at low cost, providing yet another efficiency gain from quality‐differentiated medical fees.     

Public goods,voting, and growth

We study a parametric politico‐economic model of economic growth with productive public goods and public consumption goods. The provision of public goods is funded by a proportional tax. Agents are heterogeneous in their initial capital endowments, discount factors, and the relative weights of public consumption in overall private utility. They vote on the shares of public goods in gross domestic products (GDP). We propose a definition of voting equilibrium, prove the existence and provide a characterization of voting equilibria, and obtain a closed‐form solution for the voting outcomes. Also we introduce a “fictitious” representative agent and interpret the outcome of voting as a choice made by a central planner for his benefit. Finally, we undertake comparative static analysis of the shares of public goods in GDP and of the rate of balanced growth with respect to the discount factors and the preferences for public consumption. The results of this analysis suggest that the representative‐agent version of our model is capable of capturing the interaction between many voting heterogeneous agents only if the heterogeneity is one‐dimensional.     

高校收费标准与我国居民的支付能力

我国当前高等学校的收费问题,是一个颇受关注的社会问题。就收费标准而言,超过了绝大多数居民的负担能力。为此,提出以下改革建议:科学计算高校运营成本,以人均可支配收入为依据,重新审定并适当降低收费标准,采用略有差别的收费标准,城镇居民不多收,农村学生要少收。     

Tuition fees and equality of university enrolment

Abstract .  The relationship between tuition fee changes and the university enrolment of youth by parental income group in Canada is investigated. Comparisons between youth from Canadian provinces that increased tuition fees sharply in the 1990s and youth from provinces that instituted fee freezes were integral to identifying the relationship. Tuition fee increases coincided with reductions in the university enrolment of low-income youth, but with significantly smaller changes in the university enrolment of other youth. The relationships between government funding of universities and cohort size and university enrolments are also analyzed.     

Endogenous Public Expenditures on Education

We construct a model of the determination of public funding of education through majority voting. Households have the option of privately supplementing public education. Alternatively, they can opt out of public education completely and choose private education. We find that in general the single‐crossing property cannot be used to establish existence of a majority voting equilibrium. Numerical solutions of the model reveal (i) when public education inputs and private supplements are substitutes, private school enrollment is often zero; and (ii) the funding level for public education is very sensitive to the productivity of private supplements and the elasticity of substitution between public inputs and private supplements.     

How does a public innovator license a foreign rival?

This paper uniquely considers the optimal two‐part fee of a public firm innovator licensing to a more efficient foreign rival. This is both theoretically interesting and empirically relevant. While previous research emphasises the importance of fixed fees for public firms, we show that, in this case, ad valorem fees typically dominate both fixed fees and per unit royalties. This domination carries over when a private domestic competitor is also added to the market.     

Tuition increases Geaux away? Evidence from voting on Louisiana’s amendment 2

In many states, public institutions of higher education have the autonomy to raise tuition. This has not been the case in Louisiana since a 1995 constitutional amendment required a two-thirds majority of the state legislature for any tuition increase. In November of 2016, voters in Louisiana rejected Amendment 2, a constitutional amendment that would have given state institutions of higher education autonomy in setting tuition. We examine parish-level voting on Amendment 2 using an empirical political economy model and find that parishes with a greater percentage of African-Americans and university employees were more likely to vote yes. Student enrolment at public institutions seemingly did not play a role in Amendment 2 losing.     

Tuition fees: User prices and private incentives

This paper studies the aggregate and distributional implications of introducing tuition fees for public education services into a tax system with income and consumption taxes. The setup is a neoclassical growth model where agents differ in capital holdings. We show that the introduction of tuition fees (a) improves individual incentives to work and/or save and (b) can be both efficient and equitable. The focus is on the role of tuition fees as an extra price and how this affects private incentives.     

On the voluntary provision of “weakest‐link” public goods: The case of private information

We characterize equilibria in a private‐provision public‐good game where individuals are allowed arbitrary contribution levels and the level of the public good equals the least contribution made by an individual. Equilibrium comparative statics are derived for the interim Pareto‐dominant equilibrium. First, improvements in the cost distribution of even only one player benefit all. Second, even with such “weakest‐link” public goods, for which greater similarity of preferences would seem to facilitate coordination, decreased heterogeneity can actually decrease payoffs. Indeed, increasing the riskiness of cost distributions has an ambiguous effect on welfare. Two mechanisms are provided for improving equilibrium payoffs: Technology transfer and cheap‐talk communication. While substantial welfare gains are possible, examples show that (a) technology transfer may be futile if a “regularity” condition is not satisfied and (b) cheap talk may be useless if the language for communication is not sufficiently rich.     

Is partial privatization of universities a solution for higher education?

This paper accounts simply for the link between higher education and the productive economy through educated workers. We study a model of vertical successive monopolies where students/workers acquire qualification from a University then “sell” skilled labor to a monopoly which itself sells its final product to consumers, linking through quality the education sector to the labor and output markets. We determine the optimal share the State should keep in the University to compensate for the market imperfections, while taking into account the inefficiencies of public management. The resulting partially privatized University fixes the tuition fees so as to maximize a weighted sum of profits and social welfare. We derive the optimal public share under the hypothesis that the State may subsidize the tuition fees/University losses, then under the constraint that the University should make a nonnegative profit. We prove that in both cases, the State should keep a substantial share (higher under the first hypothesis) in the University, unless public management is too inefficient in which case the University's management should be completely private.     

Public–private mix of health expenditure: A political economy and quantitative analysis

This paper constructs a simple model to examine decisions on public and private health spending under majority voting. In the model, agents with heterogeneous incomes choose how much to consume and spend on health care and vote for public health expenditure. The health status of an agent is determined by a CES composite of public and private health expenditure. The existence and uniqueness of the voting equilibrium are established. A quantitative exercise reveals the importance of the relative effectiveness of public and private health expenditure and their substitutability in determining the public‐private mix of health expenditure and in accounting for the observed differences across a sample of 22 advanced democratic countries.     

Public and Private Education in an Integrated Europe: Studying to Migrate and Teaching to Stay?

This paper investigates public and private choices between internationally applicable and country‐specific education when graduates are mobile. Human capital depends on innate skills and study effort with either type of education. It is shown that national governments provide too few students with internationally applicable education, and too many with country‐specific education. This effect is mitigated, but not entirely eliminated, by the introduction of a graduate tax, according to which graduates are required to pay part of their taxes to the country where they received their education, regardless of residence. However, private educational choices are socially optimal with suitably differentiated tuition fees.     

Education Policies: Equity, Efficiency and Voting Equilibrium

This paper investigates the effects of two specific forms of intervention in the market for education: an ability test for admission to university and a subsidy to tuition fees financed through general taxation. Both these measures enhance equality of opportunity, but their equity and efficiency effects are ambiguous. This ambiguity is reflected in the political economy equilibrium which would emerge as the result of voting on the level of the ability test and of the subsidy.     

Taxes,Tuition Fees,and Education for Pleasure

The fact that education provides both a productive and a consumptive (nonproductive) return has important and, in some cases, dramatic implications for optimal taxes and tuition fees. Using a simple model, we show that when the consumption share in education is endogenous and tuition fees are unconstrained, the optimal tax/fee system involves regressive income taxes and high tuition fees. A progressive labor income tax system may, on the other hand, be a second‐best response to politically constrained, low tuition fees. Finally, the existence of individuals with different abilities will also move the optimal income tax system toward progressivity.     

ENHANCING EFFORT SUPPLY WITH PRIZE‐AUGMENTING ENTRY FEES: THEORY AND EXPERIMENTS

Entry fees are widely observed in contests. We study the effect of a prize‐augmenting entry fee on expected total effort in an all‐pay auction setting where the contestants' abilities are private information. An entry fee reduces equilibrium entry but can enhance the entrants' effort supply. Our theoretical model demonstrates that the optimal entry fee is strictly positive and finite. In a laboratory experiment, we empirically test the effect of entry fees on effort supply. Our results provide strong support for the notion that a principal can elicit higher effort using an appropriately set entry fee to augment the prize purse.     

基于层次分析法的高等学校学费模型研究

本文分析了影响高等学校学费的众多因素,确定出生均拨款、培养费用、家庭收入和社会资助这四个主要的影响因素,并且基于层次分析法建立了影响因素之间的层次模型。通过构造出成对比较判断矩阵,对矩阵结果进行归一化处理、层次单排序及一致性检验,得到高校学费影响因素在影响程度上的排序,GDP、地区、学校类型和专业对学费的影响较大,而人员经费、设施折旧费和社会资助对学费影响较小。本文结合搜集整理的高校学费标准的相关数据,建立学费的预测模型,对学费标准进行了定量分析。结果表明：2010年学费有所增加,平均学费基本稳于4500元左右,且艺术专业学费最高。     

The impact of cost on the choice of university: evidence from Ontario

Abstract. This paper provides the first Canadian study of the link between cost to the student and the choice of university. Over the past two decades, there has been a substantial increase in the differences among Ontario universities in ‘net cost’ defined as tuition and fees minus the expected value to an academically strong student of a guaranteed merit scholarship. Our estimates generally indicate no relationship between net cost and the overall share of strong applicants that a university is able to attract. An increase in net cost is associated with an increase in the ratio of strong students from high‐income neighbourhoods to strong students from middle‐income and low‐income neighbourhoods in Arts and Science programs but not in Commerce and Engineering. Finally, more advantaged students are more likely to attend university, but merit aid is not of disproportionate benefit to those from more economically advantaged backgrounds, given registration. JEL classification: Health Education and Welfare     

Taxes or Fees? The Political Economy of Providing Excludable Public Goods

This paper provides a positive analysis of public provision of excludable public goods financed by uniform taxes or fees. Individuals differing in preferences decide, using majority rule, the provision level and financing instrument. The decisive voter has median preferences in a tax regime, but generally has above median preferences in a fee regime. Numerical solutions indicate that populations with uniform or left‐skewed distributions of preferences choose taxes, while a majority coalition of high‐ and low‐preference individuals prefer fees when preferences are sufficiently right skewed. Public good provision and welfare under fees exceeds that under taxes in the latter case.     

Old‐age Social Security versus Forward Intergenerational Public Goods Provision

This paper introduces an overlapping‐generations model with earnings heterogeneity and borrowing constraints. The labour income tax and the allocation of tax revenue between social security and forward intergenerational public goods are determined in a bidimensional majoritarian voting game played by successive generations. The political equilibrium is characterized by an ends‐against‐the‐middle equilibrium where low‐income and high‐income individuals form a coalition in favour of a lower tax rate and less social security while middle‐income individuals favour a higher tax rate and greater social security. Government spending then shifts from social security to public goods provision if higher wage inequality is associated with a borrowing constraint and a high elasticity of marginal utility of youth consumption.