Higher education is subsidized worldwide, although with pronounced differences in levels of subsidization. While public funds account for about 90% of universities' budgets in Scandinavian countries, the share of public funds in Great Britain and the US is less that 30%. Subsidization is...

We apply theories of capital market failure to ana1yzeoptima1 financing of risky higher education. In the market solution,students can only finance their education through debt. There isunderinvestment in human capita1, because some students with socia1lyprofitable investments in human capita1...

This paper analyses political forces that cause an initial expansion of public spending on higher education and an ensuing decline in subsidies. Growing public expenditures increase the future size of the higher income class and thus boost future demand for education. This demand shift implies...

Recent federal investigations and new regulations have resulted in restrictions on for-profit institutions’ access to federal student aid. We examine the enrollment effects of similar restrictions imposed on over 1,200 for-profit colleges in the 1990s. Using variation in regulations linked to...

This paper surveys the theoretical approaches used in the literature to study the phenomenon of delayed graduation and university dropout. The classical human capital model does not contemplate failure, which the amended human capital model does. Delayed graduation and university dropout are two...

This paper surveys the theoretical approaches used in the literature to study the phenomenon of delayed graduation and university dropout. The classical human capital model does not contemplate failure, which the amended human capital model does. Delayed graduation and university dropout are two...

This paper surveys the theoretical approaches used in the literature to study the phenomenon of delayed graduation and university dropout. The classical human capital model does not contemplate failure, which the amended human capital model does. Delayed graduation and university dropout are two...

A simple Tiebout model is presented where states provide university education to both immobile and mobile students. State governments choose the quality of public universities by trading off the value of education for the local immobile student population and the costs, net of tuition revenues,...

When workers are myopic and the amount of financing provided by the government is sufficiently large, some workers acquire education even if they are better off without it. We show that government-provided loans generate a propagation mechanism that exacerbates inefficient college entry....

This paper presents a model showing an incentive for a group of people to vote for higher tuition fees, even if these fees have no quality effect. The incentive is based on a non-monetary influence on utility, namely the social status or prestige of graduating. The basic assumption is that the...