Resourcing higher education in Denmark

Abstract

Denmark has a well-developed and differentiated network of public higher education institutions, encompassing universities, university colleges, business academies and specialist institutions. With 47.1% of young adults aged 25-34 holding a higher education qualification in 2019, the country also has a tertiary attainment rate above the OECD average of 44.9% (OECD, 2020[1]). The national policy framework in Denmark emphasises the role of higher education as a public good (Danish Government, 2017[2]), with institutions receiving the vast majority of their funding from public sources and students supported through a comprehensive system of public grants and loans.In 2017, Denmark embarked on an ambitious reform of its system for funding higher education institutions. This aimed to improve teaching quality, graduates' transition to the labour market and institutional leadership and profiling (Danish Government, 2017[2]). Implemented in 2019, the new system introduced a larger fixed funding component, reduced the proportion of institutional funding allocated on the basis of credits passed by students and increased the share of funds linked to other aspects of performance. All three elements of the new funding system (see Box 1) are scheduled to be reviewed in 2023 (Danish Government, 2017[2]).Against this backdrop, the Danish Ministry of Higher Education and Science asked the OECD Resourcing Higher Education Project to provide a Thematic Policy Brief to compare the new Danish system with systems in peer OECD jurisdictions and to identify policy issues that may warrant further attention as part of the future review.Detailed questions were agreed with the Ministry of Higher Education and Science at the outset of the work (see Annex A). Following a brief overview of higher education resourcing in Denmark, the analysis in this brief is structured into three substantive sections:No. 49 -Resourcing higher education in Denmark  9 Denmark's system for funding higher education institutionsThe new system for allocating public funding for instruction and operations to higher education institutions, adopted by Parliament in 2017 (Danish Government, 2017[2]), came into force on 1 January 2019. The reform aimed to increase the focus on teaching quality and preparing students for the labour market, while supporting strengthened institutional leadership and institutional profiling. The new model comprises three main funding components (grant types), which are intended to cover the cost of staff, infrastructure and day-to-day operating expenses in all types of public higher education institution. These core grants are complemented by separate funding allocations for basic and applied research to universities and considerably smaller grants for practice-oriented research to university colleges and business academies. The largest share of core funding is allocated through an "activity grant" allocated based on the number of full-time equivalent years of study successfully completed by students. This is complemented by a "basic grant"...