Income Contingency and the Electorate’s Support for Tuition

Authors:

Lergetporer, Philipp (TU Munich and ifo Institute)
Woessmann, Ludger (ifo Institute and LMU Munich)

Abstract:

We show that the electorate’s preferences for using tuition to finance higher education strongly depend on the design of the payment scheme. In representative surveys of the German electorate (N>18,000), experimentally replacing regular upfront by deferred income-contingent payments increases public support for tuition by 18 percentage points. The treatment turns a plurality opposed to tuition into a strong majority of 62 percent in favor. Additional experiments reveal that the treatment effect similarly shows when framed as loan repayments, when answers carry political consequences, and in a survey of adolescents. Reduced fairness concerns and improved student situations act as strong mediators.

Keywords:

tuition; higher education finance; income-contingent loans; voting

JEL-Classification:

H52; I22; D72

Download:

Open PDF file

Income Contingency and the Electorate’s Support for Tuition
Tagged on: