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Does a public university system avoid the stratification of public universities and the segregation of students?

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Author Info
Joan Rosselló () (Universitat de les Illes Balears)
Abstract

We present a model which allows us to show that even in a public university system where tuition and fees are fixed by the administration, a stratification of public universities according to the quality they offer and the quality of students they select, can be observed. This result is similar to that observed in private and competitive university systems. We also show that it is very unlikely that segregation and stratification could be avoided by subsidizing those universities that are more inefficient. We show also that even if stratification and segregation could be corrected with subsidies it would be at the cost of fixing the upper-bounds at the quality that could be offered at any university, hence fixing quality limits at the whole university system.

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Paper provided by Universitat de les Illes Balears, Departament d'Economía Aplicada in its series DEA Working Papers with number 26.

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Date of creation: 2007
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Handle: RePEc:ubi:deawps:26

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Related research
Keywords: School choice; state and federal aid.;

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Find related papers by JEL classification:
H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
I28 - Health, Education, and Welfare - - Education - - - Government Policy

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  1. Fethke, Gary, 2005. "Strategic determination of higher education subsidies and tuitions," Economics of Education Review, Elsevier, vol. 24(5), pages 601-609, October. [Downloadable!] (restricted)
  2. Holger Sieg & Dennis Epple & Richard Romano, 2003. "Peer effects, financial aid and selection of students into colleges and universities: an empirical analysis," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 18(5), pages 501-525. [Downloadable!]
    Other versions:
  3. Garcia-Penalosa, Cecilia & Walde, Klaus, 2000. "Efficiency and Equity Effects of Subsidies to Higher Education," Oxford Economic Papers, Oxford University Press, vol. 52(4), pages 702-22, October.
  4. Laura Romero & Elena del Rey, 2004. "Competition Between Public And Private Universities: Quality, Prices And Exams," Economics Working Papers we046423, Universidad Carlos III, Departamento de Economía. [Downloadable!]
  5. Rajindar K. Koshal, Manjulika Koshal, 2000. "State Appropriation and Higher Education Tuition: what is the relationship?," Education Economics, Taylor and Francis Journals, vol. 8(1), pages 81-89, April. [Downloadable!] (restricted)
  6. J. Peter Neary & James A. Mirrlees & Jean Tirole, 2003. "Evaluating Economics Research in Europe: An Introduction," Journal of the European Economic Association, MIT Press, vol. 1(6), pages 1239-1249, December. [Downloadable!] (restricted)
  7. Roth, Alvin E. & Sotomayor, Marilda, 1992. "Two-sided matching," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 1, chapter 16, pages 485-541 Elsevier. [Downloadable!] (restricted)
  8. Alexander Kemnitz, 2004. "Funding, Competition And Quality In Higher Education," Royal Economic Society Annual Conference 2004 130, Royal Economic Society. [Downloadable!]
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  9. Rothschild, Michael & White, Lawrence J, 1995. "The Analytics of the Pricing of Higher Education and Other Services in Which the Customers Are Inputs," Journal of Political Economy, University of Chicago Press, vol. 103(3), pages 573-86, June. [Downloadable!] (restricted)
  10. Maria Racionero & Elena Del Rey, 2006. "Financing schemes for higher education," ANUCBE School of Economics Working Papers 2006-460, Australian National University, College of Business and Economics, School of Economics. [Downloadable!]
  11. Philip J. Cook & Robert H. Frank, 1993. "The Growing Concentration of Top Students at Elite Schools," NBER Chapters, in: Studies of Supply and Demand in Higher Education, pages 121-144 National Bureau of Economic Research, Inc. [Downloadable!]
  12. Alessandro Cigno & Annalisa Luporini, 2003. "Scholarships or Student Loans? Subsidizing Higher Education in the Presence of Moral Hazard," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  13. John Beath & Joanna Poyago-Theotoky & David Ulph, 2005. "University Funding Systems and their Impact on Research and Teaching: A General Framework," Discussion Paper Series 2005_2, Department of Economics, Loughborough University. [Downloadable!]
  14. Andreu Mas-Colell, 2003. "The European Space of Higher Education: Incentive and Governance Issues," Rivista di Politica Economica, SIPI Spa, vol. 93(6), November-. [Downloadable!]
  15. De Fraja, Gianni & Iossa, Elisabetta, 2002. "Competition among Universities and the Emergence of the Elite Institution," Bulletin of Economic Research, Blackwell Publishing, vol. 54(3), pages 275-93, July.
  16. Michael J. Rizzo & Ronald G. Ehrenberg, 2003. "Resident and Nonresident Tuition and Enrollment at Flagship State Universities," NBER Working Papers 9516, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  17. Epple, Dennis & Romano, Richard E, 1998. "Competition between Private and Public Schools, Vouchers, and Peer-Group Effects," American Economic Review, American Economic Association, vol. 88(1), pages 33-62, March. [Downloadable!] (restricted)
  18. Rey, Elena Del, 2001. "Teaching versus Research: A Model of State University Competition," Journal of Urban Economics, Elsevier, vol. 49(2), pages 356-373, March. [Downloadable!] (restricted)
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  19. Caroline M. Hoxby, 1997. "How the Changing Market Structure of U.S. Higher Education Explains College Tuition," NBER Working Papers 6323, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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