Public funding of higher education

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Public Funding of Higher Education AbstractRecent criticism from different sides has expressed the view that, with scarce resources, there is little justification for massive public funding of higher education. Central to the debate is the conjecture that colleges and universities use their resources inefficiently and focus insufficiently on their mission to expand students' human potential. Our aim in this paper is to examine the theoretical premises of this conjecture in a small open economy and uncover the conditions under which public investment in higher education is efficient and desirable. We analyze non-stationary equilibria of an OLG economy, characterized by perfect capital mobility, intergenerational transfers and a hierarchical education system. The government uses income tax revenues to finance basic education and support higher education that generates skilled labor. Given this, the following issues are considered: (a) the impact of education and international markets on t he equilibrium number of low-skilled and skilled workers in each generation; (b) the economic efficiency of public subsidies to higher education in generating skilled human capital; (c) the endogenous support for a government's educational policies found in a political equilibrium.JEL-Code: D910, E250, H520.

R&D subsidies and productivity in SMEs

“…Third, there is a question of the efficient use of public funds for HE. The use of public funds for HE is inefficient if free HE attracts low-quality students (e.g., Viaene and Zilcha, 2013). Additionally, if education imposed costs on individuals, it would create incentives for students to graduate on time (e.g., Johnstone, 2004).…”

Higher Education Institutions’ Impact on the Economy

“…Institutions may be supported by research funding, contracts, and collaborations with businesses, and/or tuition fees, but a large number of HEIs are also supported by government funds composed of the contributions of local citizens (Lepori, Benninghoff, Jonbloed, Salerno, & Slipersaeter, 2007). Given that many of higher education organisations receive public funding as a primary source of their income, they are subject to public scrutiny and accountability (Daniunas, Kliukas, Prentkovskis, & Ulinskaite, 2013;Viaene & Zilcha, 2013;Kaiser, Vossensteyn, & Koelman, 2001).…”

Social mobility at the top and the higher education system

“…In these approaches, education is usually modelled as a succession of stages, and basic education is a prerequisite to enter colleges and universities. A key issue in this literature is the analysis of the distribution of public expenditures between the different education cycles, particularly between basic and higher education (Driskill and Horowitz, 2002;Su 2004Su , 2006Blankenau et al, 2007;Di Gioacchino and Sabatini, 2009;Viaene and Zilcha, 2013).…”