Time is Money: Disentangling Higher Education Cost-Sharing and Commodification Through Deferred Graduate Retirement

Abstract

Current higher education policy debates in Europe are increasingly focusing on raising the share of private funding. To date, policy proposals have centred on a relatively small number of alternatives, namely full public funding, tuition fees, either up-front or delayed and income-contingent, or a surtax on graduate incomes. Here, I present an alternative that, to my knowledge, has not been suggested previously, but sidesteps some important objections against other forms of private contributions. The basic idea explored here is to increase the statutory retirement age for higher education graduates relative to non-graduates. In principle, the resulting decrease in future public pension liabilities can be converted into increased funds for present spending on higher education. In this first discussion of the above proposal, I consider important caveats, perform an order-of-magnitude estimate of whether the financial implications of Deferred Graduate Retirement (DGR) are comparable to those of tuition fees, and discuss advantages and disadvantages compared to more established policy options. I conclude that, at least in the continental European context, DGR promises a number of economically and politically desirable properties compared to established alternatives, and deserves more serious investigation.