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(Un)desirable Effects of Output Funding for Flemish Universities

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  • Bea Cantillon
  • Annemieke De Ridder
  • Eva Vanhaecht
  • Gerlinde Verbist
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    Abstract

    Governments introducing output parameters in the funding rule of universities believe that it will induce universities to raise their teaching efforts while educational standards will remain unaffected. We show that this presupposes positive interaction effects between students’ abilities, students’ efforts and universities’ teaching efforts within the educational production function. Empirical data on success rates of Flemish university students reveal a strong correlation between students’ probabilities of success and socioeconomic background. Moreover, we find a strong social clustering within universities. Hence, combining theory and empirics we conclude that output funding for Flemish universities would lead to socially undesirable effects. Universities attracting more students with a vulnerable socioeconomic background will not be rewarded for raising their teaching effort in the same way as other universities.

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    File URL: http://www.centrumvoorsociaalbeleid.be/sites/default/files/CSB%20Working%20Paper%2010%2005_september%202010.pdf
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    Bibliographic Info

    Paper provided by Herman Deleeck Centre for Social Policy, University of Antwerp in its series Working Papers with number 1005.

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    Date of creation: Sep 2010
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    Handle: RePEc:hdl:wpaper:1005

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    Web page: http://www.centreforsocialpolicy.eu
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    Related research

    Keywords: Belgium; Education; Flanders; output funding;

    References

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    1. Elena Arias Ortiz, 2008. "What are the Factors of Success at University? A Case Study in Belgium," CESifo Economic Studies, CESifo, vol. 54(2), pages 121-148, June.
    2. Stijn Kelchtermans & Frank Verboven, 2010. "Participation and study decisions in a public system of higher education," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 25(3), pages 355-391.
    3. Elena Arias Ortiz & Catherine Dehon, 2008. "What are the factors of success at university? A case study in Belgium," Working Papers ECARES 2008_003, ULB -- Universite Libre de Bruxelles.
    4. Betts, Julian R, 1998. "The Impact of Educational Standards on the Level and Distribution of Earnings," American Economic Review, American Economic Association, vol. 88(1), pages 266-75, March.
    5. Costrell, Robert M, 1994. "A Simple Model of Educational Standards," American Economic Review, American Economic Association, vol. 84(4), pages 956-71, September.
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