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University Funding Reform, Competition, and Teaching Quality

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  • Alexander Kemnitz

Abstract

This paper explores the impact of university funding reform on teaching-quality competition. It shows that a graduate tax with differentiated, but state-regulated fees maximises the higher-education surplus, whereas student grants as well as pure and income-contingent loans do not. Fee autonomy for universities leads to results inferior to properly state-controlled fees and can make the majority of students even worse off than a central student assignment system with very poor teaching incentives.

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Bibliographic Info

Article provided by Mohr Siebeck, Tübingen in its journal Journal of Institutional and Theoretical Economics.

Volume (Year): 163 (2007)
Issue (Month): 2 (June)
Pages: 356-378

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Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200706)163:2_356:ufrcat_2.0.tx_2-4

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References

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  1. Volker Meier, 2004. "Choosing between School Systems: The Risk of Failure," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 60(1), pages 83-, April.
  2. Rothschild, Michael & White, Lawrence J, 1995. "The Analytics of the Pricing of Higher Education and Other Services in Which the Customers Are Inputs," Journal of Political Economy, University of Chicago Press, vol. 103(3), pages 573-86, June.
  3. Chapman, Bruce, 1997. "Conceptual Issues and the Australian Experience with Income Contingent Charges for Higher Education," Economic Journal, Royal Economic Society, vol. 107(442), pages 738-51, May.
  4. DEL REY, Elena, 2000. "Teaching versus research: a model of state university competition," CORE Discussion Papers 2000030, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  5. DEL REY, Elena & RACIONERO, Maria, . "Financing schemes for higher education," CORE Discussion Papers RP -2181, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  6. Wauthy, X., 1994. "Quality Choice in Models of Vertical Differentiation," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 1994033, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  7. Bovenberg, A.L. & Jacobs, B., 2001. "Redistribution and Education Subsidies are Siamese Twins," Discussion Paper 2001-82, Tilburg University, Center for Economic Research.
  8. International Monetary Fund, 1999. "Risk, Resources, and Education," IMF Working Papers 99/174, International Monetary Fund.
  9. Carmen Bevia & I?go Iturbe-Ormaetxe, . "Redistribution and Subsidies for Higher Education," UFAE and IAE Working Papers 475.01, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  10. Epple, Dennis & Romano, Richard E, 1998. "Competition between Private and Public Schools, Vouchers, and Peer-Group Effects," American Economic Review, American Economic Association, vol. 88(1), pages 33-62, March.
  11. Shaked, Avner & Sutton, John, 1982. "Relaxing Price Competition through Product Differentiation," Review of Economic Studies, Wiley Blackwell, vol. 49(1), pages 3-13, January.
  12. Caroline M. Hoxby, 1997. "How the Changing Market Structure of U.S. Higher Education Explains College Tuition," NBER Working Papers 6323, National Bureau of Economic Research, Inc.
  13. Barr, Nicholas, 1993. "Alternative Funding Resources for Higher Education," Economic Journal, Royal Economic Society, vol. 103(418), pages 718-28, May.
  14. Gary-Bobo, Robert J. & Trannoy, Alain, 2005. "Efficient Tuition & Fees, Examinations and Subsidies," CEPR Discussion Papers 5011, C.E.P.R. Discussion Papers.
  15. Garcia-Penalosa, Cecilia & Walde, Klaus, 2000. "Efficiency and Equity Effects of Subsidies to Higher Education," Oxford Economic Papers, Oxford University Press, vol. 52(4), pages 702-22, October.
  16. De Fraja, Gianni & Iossa, Elisabetta, 2002. "Competition among Universities and the Emergence of the Elite Institution," Bulletin of Economic Research, Wiley Blackwell, vol. 54(3), pages 275-93, July.
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Citations

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Cited by:
  1. Björn Kauder & Niklas Potrafke, 2013. "Government Ideology and Tuition Fee Policy: Evidence from the German States," CESifo Working Paper Series 4205, CESifo Group Munich.
  2. Eisenkopf, Gerald & Wohlschlegel, Ansgar, 2012. "Regulation in the market for education and optimal choice of curriculum," Journal of Urban Economics, Elsevier, vol. 71(1), pages 53-65.
  3. Beath, John & Poyago-Theotoky, Joanna & Ulph, David, 2012. "University funding systems: Impact on research and teaching," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy, vol. 6(2), pages 1-24.
  4. repec:hal:wpaper:halshs-00564912 is not listed on IDEAS
  5. Alexander Haupt & Tim Krieger & Thomas Lange, 2011. "Competition for the International Pool of Talent: Education Policy and Student Mobility," Working Papers CIE 35, University of Paderborn, CIE Center for International Economics.
  6. Haupt, Alexander & Krieger, Tim & Lange, Thomas, 2013. "Education policy, student migration, and brain gain," Discussion Paper Series 2013-05, University of Freiburg, Wilfried Guth Endowed Chair for Constitutional Political Economy and Competition Policy.

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