Public University in Argentina: Subsidizing the Rich?

We analyze some characteristics of the higher education system in Argentina regarding equity and efficiency. Individuals attending the university belong to the top deciles of the income distribution and to relatively highly educated families. Almost 90 percent of the students in tuition-free public universities have higher than median per capita family income and almost 50 percent attended tuition-financed private high schools. We compare these students with those who attend non tuition-free private colleges. Although students in private universities seem to have higher per capita family income, this difference is not large enough to distinguish the two groups after controlling for other variables. These facts imply that there is an implicit transfer to the richest individuals in the society. We argue that equity and efficiency of the system can be improved by charging tuition-fees. Complementary, selective scholarships and loans could be offered to attract the most talented students from poor families.