The Distributional Effects of Public Higher Education in New York City

Abstract

This paper is concerned with determining the effects of public higher education on the distribution of income in New York City. Distributional effects are determined by distributing the current expenditures of New York City and New York State for public higher education according to the percentage distribution of New York City and New York State taxes by income class and the percentage income distribution of students' families. This provides an estimate of the taxes paid by families in each income class to support public higher education, and the direct monetary benefits received by families in each income class from public higher education. Net benefits for each income class are obtained by subtracting total costs from total benefits for each income class. The net benefits from the public higher education system in New York City are positive for each income class below $15,000. There is a redistribution of income from the $15,000 and above income class to all income classes below $15,000. Distributional effects differ by type of college. At the community colleges, net benefits are positive for all income classes below $10,000. At the senior colleges, net benefits are also positive for the $10,000-$14,999 income class.