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Miguel St. Aubyn, Álvaro Pina, Filomena Garcia and Joana Pais, ISEG –
Technical University of Lisbon

Study on the efficiency and effectiveness of public spending on tertiary
education - Miguel St. Aubyn, Álvaro Pina, Filomena Garcia and Joana Pais

http://ec.europa.eu/economy_finance/publications/publication_summary16265_en.htm

Adjunto las conclusiones:

This is the final report of a study on the efficiency and effectiveness of
public spending on tertiary education in the EU commissioned by the
Directorate General Economic and Financial Affairs of the European
Commission to an ISEG/Technical University of Lisbon
team, under contract number ECFIN/329/2007/486218. This final version was
concluded in December 2008.

In this report we outline the conceptual framework, present data, and
discuss the appropriate input, output, and environment indicators, and take
into account the specific features of each country in order to compare
properly the tertiary education systems in the EU Member States. Special
care is given to the wide-ranging nature of tertiary education, where
research and teaching activities cohabit from the individual to the
institutional level.

Efficiency of public spending on tertiary education is evaluated using two
different methods: a semi-parametric method and the stochastic frontier
analysis (SFA). The first method includes data envelopment analysis (DEA) as
a first stage and the regression of the obtained efficiency scores on
explanatory factors as a second step. The latter is essentially a
regression of total tertiary education cost on the considered outputs and
factor costs, including the explicit modelling of country-specific
efficiency scores. Results from the semi-parametric and
SFA methods are essentially consistent.

Effectiveness of tertiary education is the relation between this activity
and final goals rather than closely related outputs. As a matter of fact,
tertiary education is one of the driving forces of growth. In this report we
show that there is a link between labour and total factor
productivity, employability, and spending in education. However, this link
is only effective when spending is efficient.

A number of conclusions are warranted from this study. These are:

Inefficiency in spending is an important issue when it comes to public
tertiary education. An important group of countries was found to be
operating under inefficiency conditions irrespective of the methods used.
These were not only South and Eastern European countries, but also some of
the more populous EU member states (France, Germany, and Italy). Also the US
public tertiary education sector was found to be very far from efficiency.

Tertiary education systems in a core group of countries in Europe are
clearly more efficient. The UK and to a lesser extent the Netherlands appear
at the top of the efficiency ranking irrespective of method or models used.
On the other hand, some countries tend to be consistently placed at the
bottom league (the Czech Republic, Greece, Portugal, and Slovakia).

Tertiary education efficiency is related to institutional factors and also
to the quality of secondary education. The quality of secondary education,
as measured by results attained by students at PISA internationally
comparable tests, is one of the factors that is consistently correlated to
country efficiency scores.

Other factors pertain to higher education institutional features. These are:
 - The funding rules followed in each country. When funding to institutions
depends more on outputs (e.g., graduations and publications) and less on
historical attributions or inputs, efficiency tends to increase.
 - Evaluation systems. Efficiency tends to be higher in countries where
institutions are publicly evaluated by stakeholders and/or independent
agencies.
 - Staff policy. Institutions’ autonomy to hire and dismiss academic staff
and to set their wages is correlated with higher efficiency.
Efficient spending matters for labour and total factor productivity. This is
evidence in favour of the greater importance of efficiency in higher
education spending, as it is not only a matter of public finance but also a
way of promoting innovation and growth.
Efficient spending matters for employability. The difference in unemployment
rates among graduates and among those with secondary education depends
positively on country efficiency scores.

Some countries specialise in teaching and others in research. Some countries
seem to specialise more in research than in the teaching part of tertiary
education. This is the case of the Nordic countries, of Austria, of Belgium
and the Netherlands. Others are more efficient in
teaching (Ireland, France, the East European countries). The United Kingdom
was found to be efficient on both accounts.

These conclusions lead us to put forward the following broad policy
implications:

Spending increases, if they occur, have to be carefully managed and should
go hand in hand with institutional reforms.

Institutional reform of tertiary educational systems should focus on the
following points:
 - promoting accountability of tertiary education institutions, with
careful and fair evaluation ensured by independent bodies;
 - increasing competition, by rising the institutions’ autonomy in what
concerns staff policy, namely in its ability to hire and dismiss and to set
wages;
 - designing financial schemes that relate funding to the institutions’
performance in output terms, rather than relying in inputs used or in
historical trends.

-- 
Ana de Bustos Seguela
Hypatia Eurodocumenta
http://www.hypatia.eu

"Hoy es siempre todavía"


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