Elimination of User-fees in Tertiary Education: A Distributive Analysis for Ecuador

Abstract

This paper offers new evidence and methods for understanding the distributive effect of a universal government policy to eliminate user fees in public universities in Ecuador. The main argument to eliminate user fees in higher education is that it will increase enrollment among the poor. In this regard, eliminating tuition fees is supposed to be a progressive policy. Using several panel data, however, credible evidence exists that eliminating tuition fees has no significant impact on opportunities for tertiary education. In addition, the policy becomes regressive two years after its implementation.  Results, however, are sensitive to the welfare indicator used, i.e., either assets index or income poverty. In any case, results show that, at a minimum, the policy had non-progressive effects.