Performance-related Funding of Universities: Does More Competition Lead to Grade Inflation?
AbstractGerman universities are regarded as being under-financed, inefficient, and performing below average if compared to universities in other European countries and the US. Starting in the 1990s, several German federal states implemented reforms to improve this situation. An important part of these reforms has been the introduction of indicator-based funding systems. These financing systems aimed at increasing the competition between universities by making their pubic funds dependent on their relative performance concerning different output measures, such as the share of students obtaining a degree or the amount of third party funds. This paper evaluates whether the indicator-based funding created unintended incentives, i.e. whether the reform caused grade inflation. Estimating mean as well as quantile treatment effects, we cannot support the hypothesis that increased competition between universities causes grade inflation.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6073.
Length: 23 pages
Date of creation: Oct 2011
Date of revision:
Contact details of provider:
Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org
Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Other versions of this item:
- Thomas K. Bauer & Barbara S. Grave, 2011. "Performance-related Funding of Universities – Does more Competition Lead to Grade Inflation?," Ruhr Economic Papers 0288, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
- H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
- I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
- I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-11-21 (All new papers)
- NEP-EDU-2011-11-21 (Education)
- NEP-EUR-2011-11-21 (Microeconomic European Issues)
- NEP-LAB-2011-11-21 (Labour Economics)
- NEP-SOG-2011-11-21 (Sociology of Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kocher, Martin G. & Luptacik, Mikulas & Sutter, Matthias, 2006.
"Measuring productivity of research in economics: A cross-country study using DEA,"
Socio-Economic Planning Sciences,
Elsevier, vol. 40(4), pages 314-332, December.
- Martin G. Kocher & Mikulas Luptacik & Matthias Sutter, 2001. "Measuring Productivity of Research in Economics. A Cross-Country Study Using DEA," Department of Economics Working Papers wuwp077, Vienna University of Economics, Department of Economics.
- Randall Reback, 2006.
"Teaching to the Rating: School Accountability and the Distribution of Student Achievement,"
0602, Barnard College, Department of Economics.
- Reback, Randall, 2008. "Teaching to the rating: School accountability and the distribution of student achievement," Journal of Public Economics, Elsevier, vol. 92(5-6), pages 1394-1415, June.
- Adele Atkinson & Simon Burgess & Bronwyn Croxson & Paul Gregg, 2004.
"Evaluating the Impact of Performance-related Pay for Teachers in England,"
The Centre for Market and Public Organisation
04/113, Department of Economics, University of Bristol, UK.
- Atkinson, Adele & Burgess, Simon & Croxson, Bronwyn & Gregg, Paul & Propper, Carol & Slater, Helen & Wilson, Deborah, 2009. "Evaluating the impact of performance-related pay for teachers in England," Labour Economics, Elsevier, vol. 16(3), pages 251-261, June.
- Pedro S. Martins, 2010.
"Individual teacher incentives, student achievement and grade inflation,"
LSE Research Online Documents on Economics
28285, London School of Economics and Political Science, LSE Library.
- Pedro S. Martins, 2009. "Individual Teacher Incentives, Student Achievement and Grade Inflation," Working Papers 29, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
- Pedro Martins, 2010. "Individual Teacher Incentives, Student Achievement and Grade Inflation," CEE Discussion Papers 0112, Centre for the Economics of Education, LSE.
- Martins, Pedro S., 2009. "Individual Teacher Incentives, Student Achievement and Grade Inflation," IZA Discussion Papers 4051, Institute for the Study of Labor (IZA).
- B. Curtis Eaton & Mukesh Eswaran, 2008.
"Differential Grading Standards and Student Incentives,"
2008-11, Department of Economics, University of Calgary, revised 13 Jan 2008.
- B. Curtis Eaton & Mukesh Eswaran, 2008. "Differential Grading Standards and Student Incentives," Canadian Public Policy, University of Toronto Press, vol. 34(2), pages 215-236, June.
- Markus Frolich & Blaise Melly, 2010. "Estimation of quantile treatment effects with Stata," Stata Journal, StataCorp LP, vol. 10(3), pages 423-457, September.
- Kocher, Martin G. & Luptácik, Mikulás & Sutter, Matthias, 2006. "Measuring productivity of research in economics: A cross-country study using DEA," Munich Reprints in Economics 18192, University of Munich, Department of Economics.
- Siegfried, John J & Fels, Rendigs, 1979. "Research on Teaching College Economics: A Survey," Journal of Economic Literature, American Economic Association, vol. 17(3), pages 923-69, September.
- Simon Burgess & Carol Propper & Helen Slater & Deborah Wilson, 2005.
"Who wins and who loses from school accountability? The distribution of educational gain in English secondary schools,"
The Centre for Market and Public Organisation
05/128, Department of Economics, University of Bristol, UK.
- Burgess, Simon & Propper, Carol & Slater, Helen & Wilson, Deborah, 2005. "Who wins and who loses from school accountability? The distribution of educational gain in English secondary schools," CEPR Discussion Papers 5248, C.E.P.R. Discussion Papers.
- Manuel Bagues & Mauro Sylos Labini & Natalia Zinovyeva, 2008. "Differential Grading Standards and University Funding: Evidence from Italy," Working Papers 2008-07, FEDEA.
- David A Love & Matthew J Kotchen, 2010. "Grades, Course Evaluations, and Academic Incentives," Eastern Economic Journal, Palgrave Macmillan, vol. 36(2), pages 151-163, Spring.
- Claudia Burgard & Barbara S. Grave, 2013. "Does it Pay Off to Incentivize Universities? – Performance Funding in the German Higher Education System Abstract: This paper analyzes the effect of the introduction of performance-related funding i," Ruhr Economic Papers 0457, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
- Ehlers, Tim & Schwager, Robert, 2012. "Honest grading, grade inflation and reputation," Center for European, Governance and Economic Development Research Discussion Papers 143, University of Goettingen, Department of Economics.
- Ehlers, Tim & Schwager, Robert, 2012. "Honest Grading, Grade Inflation and Reputation," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 62051, Verein für Socialpolitik / German Economic Association.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak).
If references are entirely missing, you can add them using this form.