Funding, Competition and Quality in Higher Education
AbstractThis 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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Bibliographic InfoPaper provided by Institut fuer Volkswirtschaftslehre und Statistik, Abteilung fuer Volkswirtschaftslehre in its series Discussion Papers with number 610.
Date of creation: 2003
Date of revision:
Other versions of this item:
- Alexander Kemnitz, 2004. "Funding, Competition And Quality In Higher Education," Royal Economic Society Annual Conference 2004 130, Royal Economic Society.
- 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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