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University Funding Reform, Competition, and Teaching Quality

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  • Alexander Kemnitz

Abstract

This paper explores the impact of university funding reform on teaching-quality competition. It shows that a graduate tax with differentiated, but state-regulated fees maximises the higher-education surplus, whereas student grants as well as pure and income-contingent loans do not. Fee autonomy for universities leads to results inferior to properly state-controlled fees and can make the majority of students even worse off than a central student assignment system with very poor teaching incentives.

Suggested Citation

  • Alexander Kemnitz, 2007. "University Funding Reform, Competition, and Teaching Quality," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 163(2), pages 356-378, June.
    • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200706)163:2_356:ufrcat_2.0.tx_2-4
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    Cited by:

    1. Gabrielle Demange & Robert Fenge & Silke Uebelmesser, 2020. "Competition in the quality of higher education: the impact of student mobility," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 27(5), pages 1224-1263, October.
    2. Alexander Haupt & Tim Krieger & Thomas Lange, 2011. "Competition for the International Pool of Talent: Education Policy and Student Mobility," Working Papers CIE 35, Paderborn University, CIE Center for International Economics.
    3. Björn Kauder & Niklas Potrafke, 2013. "Government Ideology and Tuition Fee Policy: Evidence from the German States," CESifo Economic Studies, CESifo Group, vol. 59(4), pages 628-649, December.
    4. Чернова Е. Г. & Ахобадзе Т. Д. & Малова А. С. & Салтан А. А., 2017. "Модели Финансирования Высшего Образования И Эффективность Деятельности Университетов Эмпирическое Исследование Европейского Опыта И Отечественная Практика," Вопросы образования // Educational Studies Moscow, National Research University Higher School of Economics, issue 3, pages 37-82.
    5. Eisenkopf, Gerald & Wohlschlegel, Ansgar, 2012. "Regulation in the market for education and optimal choice of curriculum," Journal of Urban Economics, Elsevier, vol. 71(1), pages 53-65.
    6. Marie-Laure Cabon-Dhersin & Jonas Didisse, 2017. "Inter-university competition and high tuition fees," Working Papers halshs-01174291, HAL.
    7. Giuseppe Rose, 2009. "Higher education reforms and signaling equilibria," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 12(2), pages 75-90.
    8. Kolpin, Van & Stater, Mark, 2024. "The perverse equilibrium effects of state and federal student aid in higher education," Journal of Economic Behavior & Organization, Elsevier, vol. 217(C), pages 679-691.
    9. Elena Del Rey, 2011. "Deferring higher education fees without relying on contributions from non-students," Education Economics, Taylor & Francis Journals, vol. 20(5), pages 510-521, May.
    10. Haupt, Alexander & Krieger, Tim & Lange, Thomas, 2013. "Education policy, student migration, and brain gain," Discussion Paper Series 2013-05, University of Freiburg, Wilfried Guth Endowed Chair for Constitutional Political Economy and Competition Policy.
    11. Fridman, A. & Verbetskaia, M., 2020. "Government regulation of the market for higher education," Journal of the New Economic Association, New Economic Association, vol. 45(1), pages 12-43.
    12. Beath, John & Poyago-Theotoky, Joanna & Ulph, David, 2012. "University funding systems: Impact on research and teaching," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 6, pages 1-24.

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    More about this item

    JEL classification:

    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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