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Higher Education Policy, Enrollment and Income Inequality

PublicationArticle (with peer review)
Andreas Bergh, Företagandets villkor, Günther Fink, Inkomstfördelning, Utbildning

Abstract

Objective. The objective of this article is to examine whether public expenditure on higher education has an effect on income inequality by increasing enrollment.

Methods. Combining data from the World Bank Development Indicators with data from the World Income Inequality Database version 2, we study the relation between government education expenditure and enrollment rates, as well as the relation between government education expenditure and the change in income inequality during the 1980s and the 1990s.

Results. We find that public expenditure on higher education has no positive effect on enrollment. Increased enrollment is mainly explained by higher GDP per capita. Using carefully selected Gini coefficients to ensure comparability over time, we do not find a robust relation between higher education expenditure and lower income inequality, contrary to some previous studies.

Conclusions. Government expenditure on higher education has very limited effects on enrollment and inequality. This finding, however, does not imply that there are no social benefits from such subsidies. For example, in countries where high marginal tax rates decrease the economic returns to education, governments may wish to compensate for this through subsidies.

Bergh, A. & Fink, G. (2008). ”Higher Education Policy, Enrollment and Income Inequality.”Social Science Quarterly, 89(1): 217-235.

Based on content

Higher Education, Elite Institutions, and Inequality
Article (with peer review)Publication
Bergh, A. & Fink, G.
Publication year

2009

Abstract

We develop a model of higher education to analyze the effects of elite institutions on individual educational decisions and aggregate labor market outcomes. Elite institutions allow the most talented of a given population to separate themselves from the larger pool of agents enrolled in higher education, and to earn the associated wage premium in the labor market. As elite institutions engage in cream skimming, the returns to publicly accessible education decrease, and enrollment in public higher education declines. The resulting effect on income inequality is ambiguous, since elite education increases income dispersion at the top of the income distribution, and decreases income dispersion at the bottom.

Working Paper No. 138. Immigrants’ Attitudes towards Redistribution
Working paperPublication
Bergh, A. & Fink, G.
Publication year

2009

Published in

Ratio Working Paper

Abstract

Using data from the World Value Survey we examine first and second generation immigrants’ attitudes towards income inequality and redistribution. We find that first generation immigrants are on average less favorable to redistribution compared to non-immigrants. This effect is particularly pronounced in the Nordic welfare states, while in residual welfare states immigrants have stronger preferences for more government involvement, but not necessarily towards more redistribution. We find only marginal differences for second generation immigrants, suggesting a rather rapid adaptation of local norms and political preferences.

Working Paper No. 138. Immigrants’ Attitudes towards Redistribution
Working paperPublication
Bergh, A. & Fink, G.
Publication year

2009

Published in

Ratio Working Paper

Abstract

Using data from the World Value Survey we examine first and second generation immigrants’ attitudes towards income inequality and redistribution. We find that first generation immigrants are on average less favorable to redistribution compared to non-immigrants. This effect is particularly pronounced in the Nordic welfare states, while in residual welfare states immigrants have stronger preferences for more government involvement, but not necessarily towards more redistribution. We find only marginal differences for second generation immigrants, suggesting a rather rapid adaptation of local norms and political preferences.

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