Higher Education Finance and Economic Inequality in Greece

Abstract

The constitution of Greece prohibits the operation of private tertiarylevel educational institutions. Education, according to Article 16 of the 1975 constitution, is free and the responsibility of the state. The purpose of such legislation in Greece and in many other countries is to provide equal access for all citizens. Increased economic integration in Europe, especially after 1992, is expected to influence changes in the financing of higher education and to lead to a debate over constitutional matters regarding the issue of private universities. In recent years, economists have criticized the education system and questioned the state monopoly over higher education.' Of particular concern is that public subsidization of higher education may result in a transfer of resources from the poor to the rich. The wealthier groups derive greater benefit from, and are disproportionately represented in, further education. In other words, despite the best intentions of policymakers, free higher education may not alleviate social disparities. The reason for this perverse effect is that, although university education is free of charge, the few slots available each year must be obtained through competitive examinations. Only children from wealthier families can afford the cost of private preparation for such examinations and the forgone earnings associated with university study. Moreover, the restricted supply of tertiary-level places has resulted in a mass exodus of Greek students abroad.2 This represents a serious on foreign currency reserves and a substantial brain drain of educated manpower from Greece to other nations.