Public policy and the spatial asymmetries in (higher) education growth

This paper seeks to provide a reasonable explanation for why private colleges display a much higher elasticity of schooling rates with respect to population density than public universities. It also accounts for the fact that, although private universities played an important role in the early stages of the expansion of higher education in Portugal, their relative weight declined considerably in more recent times. While the higher level of subsidisation of fixed costs in public universities is undoubtedly an important factor behind this pattern, but it is far from the only one. Public universities also tend to internalise spatial knowledge externalities, a behaviour that private institutions do not typically replicate. Consequently, schooling rates in private universities are consistently lower than those in public institutions and this gap narrows as regional accessibility and demographic density increase. Moreover, the evolution of higher education exhibits rising spatial inequalities at earlier stages and diminishing inequalities at later stages.