Competition among universities: The role of preferences for research and government finance

We build on previous results to explore the effect of student mobility on university behaviour. Our results suggest that, if universities do not care for research, they do not react to increased competition when students are able to choose where to study. Further, neither do they react to the incentives provided by the government through the financing scheme. Preferences for research thus turn out to be the key element for success of policies which aim at (i) enhancing competition in the higher education sector and (ii) affecting resulting levels of education quality and research through incentives provided by the financing scheme. Classification-JEL : L3, I22.university competition, higher education finance.

Competition between public and private universities: quality, prices and exams

The rapid growth of private higher education in response to high demand is a recent phenomenon in most European countries. This paper provides a theoretical model of the higher education market in which a public and a private university compete for students in the presence of borrowing constraints. We find that there exists a unique equilibrium in which the public institution is of higher quality than the private institution. This result supports the observation across many European countries that public universities have usually higher quality and admission standards than their private competitors

Optimal educational choice and redistribution when cultural background matters

Higher education plays an important role in determining lifetime earnings. In turn, the decision to become educated depends to a large extent on family characteristics, such as wealth and cultural background. In this paper, we focus on the interaction between fiscal policies and educational choices when cultural background matters. We derive optimality conditions for a linear income tax and a lump-sum subsidy for education in a dynamic framework in which generations are linked by cultural background. The factors that determine their sign and magnitude include concerns for redistribution, efficiency, and the educational externality on future generationsOptimal linear income tax, Subsidies, Higher education, Educational background

Determinants and consequences of internal and international migration

This paper analyzes the current migration in rural population in the south of Veracruz state (Mexico). We identify three different spaces of migration, traditional markets, the northern border and the United States. Applying a multinomial logistic model and taking into account individual, family, and local characteristics of the migrants, we find different determinants in each space. These determinants are related to the objectives, needs and means of the migrants and their families. Otherwise, each space involves different consequences to the family in terms of the relationships between migrants and the rest of their relatives.consequences, determinants, family, intergenerational relations, internal migration, international migration, Mexico, migration, reproduction, rural population

Voting on income-contingent loans for higher education

We consider risk-averse individuals who differ in two characteristics - ability to benefit from education and inherited wealth - and analyze higher education participation under two alternative financing schemes - tax subsidy and (risk-sharing) income-contingent loans. With decreasing absolute risk aversion, wealthier individuals are more likely to undertake higher education despite the fact that, according to the stylized financing schemes we consider, individuals do not pay any up-front financial cost of education. We then determine which financing scheme arises when individuals are allowed to vote between schemes. We show that the degree of risk aversion plays a crucial role in determining which financing scheme obtains a majority, and that the composition of the support group for each financing scheme can be of two different types.

An efficiency argument for affirmative action in higher education

We consider a dynamic framework in which generations are linked by educational background. In particular, individuals differ in ability to benefit from education, parental education and appurtenance to a group (either a disadvantaged minority or a non-minority). The individual decision to undertake education is inefficient because people fail to account for the fact that their getting education increases the chances that their children will also gain access to education. This intergenerational externality is higher for people from the disadvantaged minority, provided that the difference in expected utility for children of uneducated and educated individuals is larger within this group. This provides an argument for affirmative action in higher education, in the form of larger subsidies to individuals from the minority group, which is exclusively based on efficiency considerations.Affirmative action, intergenerational externality.