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Financing higher education: lessons from economic theory and reform in England

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  • Barr, Nicholas

Abstract

The finance of higher education faces a clash between technological advance, driving up the demand for skills, and fiscal constraints, given competing imperatives for public spending. Paying for universities is also immensely politically sensitive. This paper sets out core lessons for financing higher education deriving from economic theory, including the desirability of loans with income-contingent repayments. Subsequent discussion includes a general strategy for OECD countries derived from the theoretical analysis, and reforms in England in 2006 which illustrate the strategy. The paper concludes with discussion of the appropriate role of government in higher education.

Suggested Citation

  • Barr, Nicholas, 2009. "Financing higher education: lessons from economic theory and reform in England," LSE Research Online Documents on Economics 30873, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:30873
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    File URL: http://eprints.lse.ac.uk/30873/
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    References listed on IDEAS

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    1. Barr, Nicholas, 2004. "Economics of the Welfare State," OUP Catalogue, Oxford University Press, edition 4, number 9780199264971.
    2. Chapman, Bruce & Ryan, Chris, 2005. "The access implications of income-contingent charges for higher education: lessons from Australia," Economics of Education Review, Elsevier, vol. 24(5), pages 491-512, October.
    3. Lorraine Dearden & Emla Fitzsimons & Alissa Goodman & Greg Kaplan, 2008. "Higher Education Funding Reforms in England: The Distributional Effects and the Shifting Balance of Costs," Economic Journal, Royal Economic Society, vol. 118(526), pages 100-125, February.
    4. Barr, Nicholas & Crawford, Iain, 1998. "The Dearing Report and the government's response : a critique," LSE Research Online Documents on Economics 283, London School of Economics and Political Science, LSE Library.
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    Cited by:

    1. Gvetadze, Salome, 2014. "Financing the Mobility of Students in European Higher Education," EIF Working Paper Series 2014/21, European Investment Fund (EIF).
    2. Arlen Guarín & Sebastián Londoño & Carlos Medina & Julieth Parra & Christian Posso & Carlos Eduardo Vélez, 2016. "Estimating the Effect of Attending a Public versus a Private University in Colombia on Academic Achievement **** Una Estimación del Efecto sobre el Rendimiento Académico de Asistir a una Universidad P," Borradores de Economia 968, Banco de la Republica de Colombia.
    3. Alla Fridman & Alexey Verbetsky, 2017. "Universities' competition under dual tuition system," Economics Bulletin, AccessEcon, vol. 37(3), pages 2122-2132.
    4. Shukhrat Kholmuminov & Robert E Wright, 2017. "Cost efficiency analysis of public higher education institutions in Uzbekistan," Working Papers 1704, University of Strathclyde Business School, Department of Economics.
    5. Mehmet Cahit GÜRAN & Emine AYRANCI, 2019. "Efficiency Changes in Higher Education in OECD Countries: Implementation of Malmquist Total Factor Productivity Index for 2000 and 2012 PeriodAbstract: This study analyzes the total factor productivit," Sosyoekonomi Journal, Sosyoekonomi Society, issue 27(41).
    6. Wales, Philip, 2013. "Access all areas? The impact of fees and background on student demand for postgraduate higher education in the UK," LSE Research Online Documents on Economics 57846, London School of Economics and Political Science, LSE Library.
    7. Juha KETTUNEN, 2016. "The Performance-Based Funding Scheme of Universities," Management Dynamics in the Knowledge Economy, College of Management, National University of Political Studies and Public Administration, vol. 4(1), pages 109-124, March.
    8. Shukhrat Kholmuminov & Shayzak Kholmuminov & Robert E Wright, 2017. "Resource dependence analysis of public higher education institutions in Uzbekistan," Working Papers 1703, University of Strathclyde Business School, Department of Economics.

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    More about this item

    JEL classification:

    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid

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