This paper compares the organisation of the university sector under unregulated private provision with the structure which would be chosen by a welfare maximising government. It studies a general equilibrium model where students attend university to earn higher incomes in the labour market, and universities teach them and carry out research. Each university chooses its tuition fee to maximise the amount of resources it can devote to research. Research bestows an externality on society. Government intervention needs to balance labour market efficiency considerations -- which would tend to equalise the number of students attending each university -- with considerations of efficiency on the production side, which suggest that the most productive universities should teach more students and carry out more research. We find that government concentrates research more that the private market would, but less than it would like to do if it had perfect information about the productivity of universities. It also allows fewer universities than would operate in a private system.
DE FRAJA, G., Valbonesi, P. (2012). The design of the university system. JOURNAL OF PUBLIC ECONOMICS, 96(3-4), 317-330 [10.1016/j.jpubeco.2011.10.005].
The design of the university system
DE FRAJA, GIOVANNI;
2012-01-01
Abstract
This paper compares the organisation of the university sector under unregulated private provision with the structure which would be chosen by a welfare maximising government. It studies a general equilibrium model where students attend university to earn higher incomes in the labour market, and universities teach them and carry out research. Each university chooses its tuition fee to maximise the amount of resources it can devote to research. Research bestows an externality on society. Government intervention needs to balance labour market efficiency considerations -- which would tend to equalise the number of students attending each university -- with considerations of efficiency on the production side, which suggest that the most productive universities should teach more students and carry out more research. We find that government concentrates research more that the private market would, but less than it would like to do if it had perfect information about the productivity of universities. It also allows fewer universities than would operate in a private system.File | Dimensione | Formato | |
---|---|---|---|
DeFraja Valbonesi.pdf
solo utenti autorizzati
Licenza:
Non specificato
Dimensione
346.85 kB
Formato
Adobe PDF
|
346.85 kB | Adobe PDF | Visualizza/Apri Richiedi una copia |
I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.