This paper analyses the effects of public funding of higher education on
the welfare of the different agents. It takes into account the hierarchical
nature of the educational system and also the fact that parents always
have the possibility to complement basic public education with private
expenditures in individual tutoring.
It is obtained that although public funding implies a larger access to
higher education it is always the case that some of the agents that gain
access lose in welfare terms. Moreover, it is shown that the marginal agent
to access university would always prefer a pure private funding system.
Thus, when studying the effects of public funding of higher education, we
can not identify gaining access to University with an increase in welfare.
Finally, I consider a funding system where only those that send their
o¤spring to university support the funding of higher education.FEDER through the Fundação para a Ciência e
Tecnologi
