The field of education policy seems to create situations where traditional left and right wing
positions become confused: a Labour government introduces university tuition fees, opposed by
the Conservative party and the National Union of Students. The Labour education secretary
condemns the system of university students grants as 'regressive', while a Labour education
minister is heckled at the National Union of Teachers conference.
In new research published in the latest issue of the Economic Journal, Gianni De Fraja explains
how the ambiguous coalitions that support these policies - the rich ally themselves with some of
the poor against the rest of the population - reflect the ambiguous distributional effects of
university admissions policies. He shows how a coalition is formed between the rich and some of
the poor in support of a reduction in student grants.
De Fraja presents a theoretical analysis that puts the current policy discussion about higher
education into context. At the root of the problem is the fact that investment in education benefits
most those who are already better off - typically because they are brighter. This is unlike, say,
investment in health care, where the sick benefit the most. In university education, some form of
government intervention is needed because the market mechanism does not ensure equality of
opportunity. Specifically, De Fraja analyses two policies, chosen because of their obvious
relevance to the UK:
l The imposition of ability tests for admission to university.
l A subsidy to university attendance - a student grant - financed by general taxation.
Both of these policies improve equality of opportunity, as they increase the number of students
from socially deprived background, at the expense of students from better off households. The
first policy benefits most better off households with bright children, whereas the second policy is
most detrimental to better off households and poorer households with not very bright children
(who have to pay the tax, but do not benefit from university education). It is therefore in their
mutual interests to oppose a system of subsidies to university attendance.
Notes for Editors: 'Education Policies: Equity, Efficiency and Voting Equilibrium' by Gianni De
Fraja is published in the May 2001 issue of the Economic Journal. De Fraja is at the University of
York.
For Further Information: contact Gianni De Fraja on 01904-433789 (email: gd4@york.ac.uk);
RES Media Consultant Romesh Vaitilingam on 0117-983-9770 or 07768-661095 (email:
romesh@compuserve.com); or RES Media Assistant Niall Flynn on 020-7878-2919 (email:
nflynn@cepr.org).