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University Funding Systems and their Impact on Research and Teaching: A General Framework

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This paper addresses the following question: how does a higher education funding system influence the trade-off that universities make between research and teaching? We do so by constructing a general model that allows universities to choose actively the quality of their teaching and research when faced with different funding systems. In particular, we derive the feasible sets that face universities under such systems and show how, as the parameters of the system are varied, the nature of the university system itself changes. The “culture” of the university system thus becomes endogenous. This makes the model useful for the analysis of reforms in funding and also for international comparisons.

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  • 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.
    • Handle: RePEc:lbo:lbowps:2005_2
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    File URL: http://www.lboro.ac.uk/departments/ec/Reasearchpapers/2005/UniversityFundingSystems.pdf
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    References listed on IDEAS

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    1. Beath, John & Owen, Robert F. & Poyago-Theotoky, Joanna & Ulph, David, 2003. "Optimal incentives for income-generation in universities: the rule of thumb for the Compton tax," International Journal of Industrial Organization, Elsevier, vol. 21(9), pages 1301-1322, November.
    2. De Fraja, Gianni & Iossa, Elisabetta, 2002. "Competition among Universities and the Emergence of the Elite Institution," Bulletin of Economic Research, Wiley Blackwell, vol. 54(3), pages 275-293, July.
    3. 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.
    4. Chapman, Bruce, 1997. "Conceptual Issues and the Australian Experience with Income Contingent Charges for Higher Education," Economic Journal, Royal Economic Society, vol. 107(442), pages 738-751, May.
    5. Kemnitz, Alexander, 2003. "Funding, Competition and Quality in Higher Education," Discussion Papers 610, Institut fuer Volkswirtschaftslehre und Statistik, Abteilung fuer Volkswirtschaftslehre.
    6. Barr, Nicholas & Crawford, Iain, 1998. "The Dearing Report and the government's response : a critique," LSE Research Online Documents on Economics 283, London School of Economics and Political Science, LSE Library.
    7. David Greenaway & Michelle Haynes, 2003. "Funding Higher Education in The UK: The Role of Fees and Loans," Economic Journal, Royal Economic Society, vol. 113(485), pages 150-166, February.
    8. 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 702-722, October.
    9. Charles T. Clotfelter, 1999. "The Familiar but Curious Economics of Higher Education: Introduction to a Symposium," Journal of Economic Perspectives, American Economic Association, vol. 13(1), pages 3-12, Winter.
    10. Robert J. Gary-Bobo & Alain Trannoy, 2004. "Efficient Tuition Fees, Examinations, and Subsidies (new title: Efficient tuition fees and subsidies)," CESifo Working Paper Series 1189, CESifo.
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    Cited by:

    1. Joan Rosselló, 2007. "Does a public university system avoid the stratification of public universities and the segregation of students?," DEA Working Papers 26, Universitat de les Illes Balears, Departament d'Economía Aplicada.
    2. Fouad El Ouardighi & Konstantin Kogan & Radu Vranceanu, 2013. "Publish or Teach ? : Analysis of the Professor's Optimal Career Plan," Working Papers hal-00823514, HAL.
    3. De Fraja, Gianni & Valbonesi, Paola, 2012. "The design of the university system," Journal of Public Economics, Elsevier, vol. 96(3), pages 317-330.
    4. Jellal, Mohamed, 2014. "Gouvernance optimale moderne des universités [Modern optimal governance of universities]," MPRA Paper 57275, University Library of Munich, Germany.
    5. Joan Rosselló-Villalonga, 2007. "¿Debería tener las universidades total autonomía en la selección del profesorado," Investigaciones Economicas, Fundación SEPI, vol. 31(3), pages 374-414, September.
    6. El Ouardighi, Fouad & Kogan, Konstantin & Vranceanu, Radu, 2013. "Publish or teach? Analysis of the professor's optimal career path," Journal of Economic Dynamics and Control, Elsevier, vol. 37(10), pages 1995-2009.
    7. repec:hal:journl:hal-00823514 is not listed on IDEAS

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    More about this item

    Keywords

    University funding system; higher education; teaching quality; research quality; research elite.;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid

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