For the most part, when we think about social mobility, our concerns are with those on the lower rungs of society’s ladder; people “for whom life is a struggle and who work all hours to keep their heads above water” as Prime Minster Theresa May put it in her most recent speech on the matter. One of the issues often considered is how likely are those from disadvantaged backgrounds to enter into higher education. This is often viewed as the direct route to the top jobs in the UK where a degree is almost always a pre-requisite now. The hope is that, if society is meritocratic, rewarding those for effort and achievement rather than family background, if we get more disadvantaged kids into higher education then this will equalise their chances of reaching the top jobs. Unfortunately, in the UK, this does not seem to be the case. Recent research by ourselves, and colleagues from Cambridge, Bath and Warwick university has revealed that higher education is not the leveller we might hope it to be, and that socio-economic differences persist throughout higher education and into the graduate labour market, even comparing those with similar educational attainment.
By Maria Racionero & Elena Del Rey, Centre for Economic Policy Research, Research School of Economics, Australian National University
There is a growing trend around the world towards increasing students’ contributions to the cost of higher education. One of the advantages is that, when students pay for their education, they do so in the country where they study. Relying on tuition fees to finance higher education can however be both inefficient and unfair, preventing access to higher education to liquidity constrained but academically deserving individuals. Even if loans are available, risk aversion can negatively affect participation. Income-contingent loans (ICLs) provide insurance against adverse labour market outcomes by making repayments dependent on the amount of income earned. In particular, no repayment is typically due when earnings are below a minimum income repayment threshold. Australia was the first country to implement in 1989 an ICL scheme to finance the cost of higher education, and other countries have since adopted similar schemes. These schemes have traditionally relied on general taxation to finance part of the cost of education, and most notably the cost of education of those unable to achieve the minimum income repayment threshold.
In Chapter 8 of “The Mobility of Students and the Highly Skilled: Implications for Education Financing and Economic Policy”, we explore the choice between two types of ICLs: one partly subsidised, often denominated risk-sharing ICL, where the cost of the education of the unsuccessful students falls on the taxpayer; and the other self-financed, often denominated risk-pooling ICL, where the cost of the education of the unsuccessful students falls on the successful graduates of the cohort. Our purpose is to capture the situation faced by governments, such as those in Australia or UK, considering switching from partly subsidised to mostly self-financed funding schemes, while still providing insurance through income contingent repayments.
We consider individuals who are risk-averse and differ in their ability to benefit from education and inherited wealth. We first compare the higher education participation achieved with each scheme. We then show how each individual’s preference over the schemes depends on her ability and wealth and characterise the majority voting outcome. We identify circumstances under which the self-financing ICL is supported by a majority, even if a proportion of those who always study regardless of the scheme in place – precisely those with relatively higher wealth and ability – prefer the subsidised to the self-financed ICL.
By Elisabetta Marinelli (Institute for Prospective Technological Studies, Joint Research Centre, European Commission, Seville, Spain), Fernandez-Zubieta Ana (Institute for Advanced Social Studies-Spanish National Research Council (IESA-CSIC) and Elena-Perez Susana (Institute for Prospective Technological Studies, Joint Research Centre, European Commission, Seville, Spain)
DISCLAIMER: The views expressed are those of the authors and do not necessarily reflect the position of their institution of employment.
The mobility of researchers, particularly internationally, has been encouraged at the policy level to promote enriching experiences, build networks and facilitate the processes of knowledge and technology generation and dissemination. We estimate the impact of international research mobility on the careers of established university researchers working in five European countries—France, Germany, Italy, the Netherlands, and the United Kingdom. We find that stayers and researchers who return to the country of their PhD, are the most likely to achieve tenure, and repeat-migrants – who have left the country of their PhD and moved countries again since – are the least likely.