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The Provision of Higher Education in a Global World - Analysis and Policy Implications

  • Demange, Gabrielle
  • Fenge, Robert
  • Uebelmesser, Silke

Mobility is a driving force in the labor market. It is especially crucial as higher education is concerned as it enlarges the opportunities of students and graduates or skilled workers, respectively, and affects the returns to their investment in education. Mobile students and graduates react to the institutional framework and on their turn induce changes in governmental policies as competition between educational institutions and countries becomes more intense. We are here interested in how governmental decisions about the financial regime and the quality level of higher education interact with individual incentives to invest in higher education in closed and in open economies. This question is especially important in the European Union. The Bologna Process, which was launched in 1999, precisely aims at removing the obstacles to mobility for students by establishing the so-called European Higher Education Area by the year 2010. These measures - especially those that increase transparency and comparability of different degree programmes - should lower migration costs. With equal conditions for access - following the non-discrimination principle that holds for EU-citizens - increased mobility is supposed to lead to more competition in terms of quality among different institutions of higher education. But the European Higher Education Area also creates incentives for governments to free-ride on other countries and regions. Free-riding should be especially strong if students are less mobile than skilled workers and if most of those who study abroad return to their home country after graduation. This shows how important it is for an evaluation of the Bologna Process to study different mobility scenarios. Two main questions arise. What is the rationale to increase student mobility? What will be the impact on the financing of higher education and its quality level? Our aim is to build a simple model to address these questions and to derive policy implications as to the optimal financial regime and quality level of higher education in the presence of migration opportunities.

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Paper provided by CEPREMAP in its series CEPREMAP Working Papers (Docweb) with number 0806.

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Length: 31 pages
Date of creation: Jan 2008
Date of revision:
Handle: RePEc:cpm:docweb:0806
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  1. Gabrielle Demange & Robert Fenge & Silke Uebelmesser, 2008. "Financing Higher Education and Labor Mobility," CESifo Working Paper Series 2362, CESifo Group Munich.
  2. Joachim R. Frick & Markus M. Grabka & Olaf Groh-Samberg, 2007. "Economic Gains from Publicly Provided Education in Germany," Discussion Papers of DIW Berlin 709, DIW Berlin, German Institute for Economic Research.
  3. Floriana Cerniglia & Laura Pagani, 2007. "The European Union and the Member States: Which Level of Government Should Do what? An Empirical Analysis of Europeans’ Preferences," CESifo Working Paper Series 2067, CESifo Group Munich.
  4. Jacobs, Bas & van der Ploeg, Frederick, 2005. "Guide to Reform of Higher Education: A European Perspective," CEPR Discussion Papers 5327, C.E.P.R. Discussion Papers.
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  8. Creedy, John & Francois, Patrick, 1990. "Financing higher education and majority voting," Journal of Public Economics, Elsevier, vol. 43(2), pages 181-200, November.
  9. Stijn Kelchtermans & Frank Verboven, 2007. "Reducing product diversity in higher education," Center for Economic Studies - Discussion papers ces0726, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
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  11. Claudio Thum & Silke Uebelmesser, 2001. "Mobility and the Role of Education as a Commitment Device," CESifo Working Paper Series 450, CESifo Group Munich.
  12. Kemnitz, Alexander, 2005. "Educational Federalism and the Quality Effects of Tuition Fees," Discussion Papers 617, Institut fuer Volkswirtschaftslehre und Statistik, Abteilung fuer Volkswirtschaftslehre.
  13. Elena Del Rey, 2001. "Economic Integration and Public Provision of Education," Empirica, Springer, vol. 28(2), pages 203-218, June.
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  15. Steven J. Davis, 1992. "Cross-Country Patterns of Change in Relative Wages," NBER Working Papers 4085, National Bureau of Economic Research, Inc.
  16. Hessel Oosterbeek & Dinand Webbink, 2006. "Assessing the returns to studying abroad," CPB Discussion Paper 64, CPB Netherlands Bureau for Economic Policy Analysis.
  17. Silke Uebelmesser, 2005. "To go or not to go: Emigration from Germany," CESifo Working Paper Series 1626, CESifo Group Munich.
  18. Marcel Gérard & Fernando Ruiz, 2006. "Interjurisdictional Competition for Higher Education and Firms," CESifo Working Paper Series 1719, CESifo Group Munich.
  19. Nicola D. Coniglio & Francesco Prota, 2008. "Human capital accumulation and migration in a peripheral EU region: the case of Basilicata," Papers in Regional Science, Wiley Blackwell, vol. 87(1), pages 77-95, 03.
  20. Johnson, George E, 1984. "Subsidies for Higher Education," Journal of Labor Economics, University of Chicago Press, vol. 2(3), pages 303-18, July.
  21. Claudia Goldin & Lawrence F. Katz, 2007. "The Race between Education and Technology: The Evolution of U.S. Educational Wage Differentials, 1890 to 2005," NBER Working Papers 12984, National Bureau of Economic Research, Inc.
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