The Redistributive Effects of British Subsidies to Higher Education

This article examines the distribution of net benefits from subsidies to higher education in the United Kingdom, focusing on the system in place in the mid-1990s. We find the distribution to be regressive with respect to graduate income, with high lifetime earners receiving large net subsidies, while low lifetime earners are net contributors to the system. Our findings are of particular relevance to policymakers in the UK in light of the ongoing debate over tuition fees. However, these results should also be of interest to anyone who studies the socioeconomic implications of higher education.