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Funding, Competition And Quality In Higher Education

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  • Alexander Kemnitz

Abstract

This paper explores the impact of university finance reforms on teaching quality. It is shown that the graduate tax can achieve efficiency with tuition fees administered by the government, while student grants, pure and income contingent loans are bound to fail. All options are inefficient when universities have the autonomy to set tuition fees. Then, pure loans dominate the graduate tax and are more efficient than income contingent loans unless peer group effects are strong. However, properly chosen uniform administered fees create an even higher surplus. Moreover, pure loans may make the majority off students worse of than a central assignment system with very poor quality incentives.
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  • Alexander Kemnitz, 2004. "Funding, Competition And Quality In Higher Education," Royal Economic Society Annual Conference 2004 130, Royal Economic Society.
    • Handle: RePEc:ecj:ac2004:130
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    Cited by:

    1. John Beath & Joanna Poyago-Theotoky & David Ulph, 2005. "University Funding Systems and their Impact on Research and Teaching: A General Framework," Discussion Paper Series 2005_2, Department of Economics, Loughborough University.
    2. Ordine, Patrizia & Rose, Giuseppe, 2008. "The supply of education quality in a spatial model with asymmetric moving costs," Research in Economics, Elsevier, vol. 62(4), pages 197-214, December.
    3. Lisa Grazzini & Annalisa Luporini & Alessandro Petretto, 2010. "Competition between State Universities," Working Papers - Economics wp2010_02.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    4. Patrizia Ordine & Giuseppe Rose, 2007. "Students' Mobility and Regional Disparities in Quality and Returns to Education in Italy," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 66(2), pages 149-176, July.
    5. Joan Rosselló, 2007. "Does a public university system avoid the stratification of public universities and the segregation of students?," DEA Working Papers 26, Universitat de les Illes Balears, Departament d'Economía Aplicada.

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    More about this item

    JEL classification:

    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid

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