Howard Glennerster, Jane Falkingham and Nicholas Barr (1995), 'Education Funding, Equity and the Life Cycle', in Jane Falkingham and John Hills (eds), The Dynamic of Welfare: The Welfare State and the Life Cycle, Prentice-Hall/Harvester Wheatsheaf, 1995, Ch. 8, pp. 150-66.
Until recently higher education for undergraduates was provided free of charge but access to it was limited. This has resulted in perverse distributional effects with those who benefit from education receiving higher lifetime incomes, yet the cost of this education being spread across the total population. It has also resulted in perverse, but not necessarily irrational, private decisions with those who might be expected to face the highest private rates of return to tertiary education also being the least likely to participate in it. This chapter discusses the benefits received from education and training and examines various options for the funding of higher education - options which result both in a more equitable distributional outcome and which would allow the release of additional resources necessary for the expansion of tertiary education.
Education and training have a number of characteristics that make them unusual. Though partly enjoyed for its own sake education is, to a large