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The Political Economy of Higher Education Finance: How Information and Design Affect Public Preferences for Tuition

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  • Lergetporer, Philipp

    (ifo Institute at the University of Munich)

  • Woessmann, Ludger

    (ifo and LMU Munich)

Abstract
Public preferences for charging tuition are important for determining higher education finance. To test whether public support for tuition depends on information and design, we devise several survey experiments in representative samples of the German electorate. The electorate is divided, with a slight plurality opposing tuition. Providing information on the university earnings premium raises support for tuition by 7 percentage points, turning the plurality in favor. The opposition-reducing effect persists two weeks after treatment. Information on fiscal costs and unequal access does not affect public preferences. Designing tuition as deferred income-contingent payments raises support by 16 percentage points, creating a strong majority favoring tuition. The same effect emerges when framed as loan payments. Support decreases with higher tuition levels and increases when targeted at non-EU students.

Suggested Citation

  • Lergetporer, Philipp & Woessmann, Ludger, 2019. "The Political Economy of Higher Education Finance: How Information and Design Affect Public Preferences for Tuition," Rationality and Competition Discussion Paper Series 145, CRC TRR 190 Rationality and Competition.
    • Handle: RePEc:rco:dpaper:145
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    Cited by:

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    2. Adams-Prassl, Abi & Boneva, Teodora & Golin, Marta & Rauh, Christopher, 2023. "The value of sick pay," European Economic Review, Elsevier, vol. 151(C).
    3. Cattaneo, Maria & Lergetporer, Philipp & Schwerdt, Guido & Werner, Katharina & Woessmann, Ludger & Wolter, Stefan C., 2020. "Information provision and preferences for education spending: Evidence from representative survey experiments in three countries," European Journal of Political Economy, Elsevier, vol. 63(C).
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    5. Angerer, Silvia & Glätzle-Rützler, Daniela & Lergetporer, Philipp & Rittmannsberger, Thomas, 2023. "How does the vaccine approval procedure affect COVID-19 vaccination intentions?," European Economic Review, Elsevier, vol. 158(C).
    6. Philipp Lergetporer & Katharina Werner & Ludger Woessmann, 2021. "Does Ignorance of Economic Returns and Costs Explain the Educational Aspiration Gap? Representative Evidence from Adults and Adolescents," Economica, London School of Economics and Political Science, vol. 88(351), pages 624-670, July.
    7. Del Rey, Elena & Lopez-Garcia, Miguel-Angel, 2020. "On government-created credit markets for education and endogenous growth," Economic Modelling, Elsevier, vol. 92(C), pages 170-179.
    8. Hügle, Dominik, 2020. "Higher education funding in Germany: A distributional lifetime perspective," Discussion Papers 2021/1, Free University Berlin, School of Business & Economics.
    9. Hügle, Dominik, 2021. "The decision to enrol in higher education," Discussion Papers 2021/8, Free University Berlin, School of Business & Economics.
    10. Hassani-Nezhad, Lena & Anderberg, Dan & Chevalier, Arnaud & Lührmann, Melanie & Pavan, Ronni, 2021. "Higher education financing and the educational aspirations of teenagers and their parents," Economics of Education Review, Elsevier, vol. 85(C).

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    More about this item

    Keywords

    tuition; higher education; political economy; survey experiments; information; earnings premium; income-contingent loans; voting;
    All these keywords.

    JEL classification:

    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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