Abstract
This paper examines the incentive effects of risk-sharing between student and University in the English system. The “Graduate Premium” has been widely reported and has been used to justify rising attendance at University and increased individual and/or governmental expenditure on tertiary education. But this premium is simply the mean of a wide distribution, varying, inter alia, by subject, institution, year of graduation and individual. We assume that Universities exist in a state of monopolistic competition and are subject to a budget constraint and find that a funding model that incorporates risk-sharing improves the efficiency of educational delivery while maintaining subject diversity and access.
| Original language | English |
|---|---|
| Pages (from-to) | 239-257 |
| Journal | Economic Affairs |
| Volume | 36 |
| Issue number | 3 |
| DOIs | |
| Publication status | Published - 21 Oct 2016 |
Keywords
- graduate premium
- higher education policy
- risk-sharing
- student finance
- universities
Access to Document
- Author Accepted Manuscript
"This is the peer reviewed version of the following article:Ainsworth, P., McKenzie, T., and Stroyny, A. (2016) Incentive Effects in Higher Education: an Improved Funding Model for Universities. Economic Affairs, 36: 239–257, which has been published in final form at http://dx.doi.org/10.1111/ecaf.12194. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving."