ERIC Number: ED224439
Record Type: RIE
Publication Date: 1978-Feb
Reference Count: 0
The Equity of Public Subsidies for Higher Education: Some Thoughts on the Literature. Working Papers in Education Finance, No. 5.
Nelson, Susan C.
The role of equity in determining how higher education should be supported is considered, along with several approaches for measuring benefits and costs of public subsidies, and conclusions from the literature. Attention is directed to equity in financing higher education because higher education is often advocated as a mechanism for providing equality of opportunity. Subsidies might be considered equitable if they lead to a more equal distribution of lifetime income or enhance social mobility over time. Several studies are examined, including those of W. Lee Hansen and Burton Weisbrod (1969) and of John Conlisk (1977). The private benefits of subsidies and costs and the net result of combining costs and benefits are examined. It is suggested that the ideal measure of equity, the effect of the subsidies on lifetime incomes, cannot be approximated with existing data. An alternative method used in most of the literature--the net benefit approach--has generally produced the finding that subsidies do redistribute current income from rich toward poor, but conceptual and technical problems make the conclusions and usefulness of this method unreliable as a measure of equity. Another approach, to examine the equity of the benefits and costs separately, suggests that current tuition subsidies are not equitably financed and have not succeeded. The policy question of whether a strategy such as tuition, that rises with income, would be equitable has not yet been answered. (SW)
Descriptors: Costs, Educational Equity (Finance), Educational Finance, Educational Opportunities, Equal Education, Evaluation Methods, Federal Aid, Financial Policy, Financial Support, Government School Relationship, Higher Education, Income, Measurement Techniques, Resource Allocation, State Aid, Tax Allocation
Publication Type: Information Analyses; Speeches/Meeting Papers
Education Level: N/A
Authoring Institution: Education Commission of the States, Denver, CO. Education Finance Center.
Note: Paper presented at the Postsecondary Education Finance Conference (Denver, CO, November 16-18, 1977).