The Political Economy of Higher Education Finance: How Information and Design Afect Public Preferences for Tuition Philipp Lergetporer (ifo Institute at the University of Munich) Ludger Woessmann (ifo and LMU Munich) Discussion Paper No. 145 February 27, 2019 Collaborative Research Center Transregio 190 | www.rationality-and-competition.de Ludwig-Maximilians-Universität München | Humboldt-Universität zu Berlin Spokesperson: Prof. Dr. Klaus M. Schmidt, University of Munich, 80539 Munich, Germany +49 (89) 2180 3405 |
[email protected] The Political Economy of Higher Education Finance: How Information and Design Affect Public Preferences for Tuition* Philipp Lergetporer and Ludger Woessmann† Abstract Public preferences for charging tuition are important for determining higher education finance. To test whether public support for tuition depends on information and design, we devise several survey experiments in representative samples of the German electorate (N>19,500). The electorate is divided, with a slight plurality opposing tuition. Providing information on the university earnings premium raises support for tuition by 7 percentage points, turning the plurality in favor. The opposition-reducing effect persists two weeks after treatment. Information on fiscal costs and unequal access does not affect public preferences. Designing tuition as deferred income-contingent payments raises support by 16 percentage points, creating a strong majority favoring tuition. The same effect emerges when framed as loan payments. Support