Bridging the Learning Gap in the Market for Higher Education: E-learning and Public Subsidies

This article aims at analyzing the adoption patterns which apply on the market for higher education when two types of learning organizations – namely, traditional learning and e-learning organizations – provide educational programs. We focus on the impact of public subsidies to e-learning providers in order to evaluate the conditions under which the learning gap is bridged. A welfare analysis is introduced to estimate the relevance of such ‘pro e-learning’ public policies. Our first results show that public subsidies enable the e-learning organization to provide quality-based and pricing strategies that tend to be similar to those of the brick’n mortar organization. Besides, we find that such short-term policies positively impact on the global level of quality which is provided by both providers. Nevertheless, our welfare analysis underlines contrasted results about the relevance of such short-term public policies.