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Income contingency and the electorate’s support for tuition

Income contingency and the electorate’s support for tuition

606/2022 Philipp Lergetporer and Ludger Woessmann
working papers,political economy

606/2022 Philipp Lergetporer and Ludger Woessmann

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 favour. 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.

Political Economy