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Higher Education: (Almost) Free Tuition vs. Quotas vs. Targeted Vouchers
Código: WPE – 104
This paper compares theoretically three alternative systems: the cur- rent one adopted in some countries (e.g, Brazil, Mexico, Portugal and Spain), in which students who perform better in the entering exam obtain the right to attend the public university without paying the full tuition; a system of a¢ rmative action quotas in public universities, to benefit low income students; and a targeted vouchers system that can be used either to pay private or public university tuiton. The comparison indicates that the last system leads to: (i) a higher quality of the labor force; (ii) a more e¢ cient allocation of resources; and (iii) a greater social mobility. Finally, the analysis suggests that the introduction of the targeted voucher system may face opposition due to two potential consequences of its implemen- tation: the reduction in the welfare of specific groups and the shut down of the less competitive public universities.