Economic analysis of transnational education

Donald Lien

Education Economics, 2008, vol. 16, issue 2, pages 149-166

Abstract: This paper considers the effects of a branch campus on the individual college education decision and the economic welfare of a developing country. There are a single domestic college and a single branch campus established by a foreign university. A graduate from the branch campus has an opportunity to emigrate and work abroad, earning a higher income, whereas a graduate from the domestic university is not allowed to work abroad. We derive the optimal quality of the branch campus for a profit-seeking operator and a benevolent government, respectively. Economic welfare consideration suggests that a low-quality branch campus is most probably beneficial whereas a high-quality branch campus may cause severe brain drain problems and be harmful to a developing country.

Keywords: college education; branch campus; brain drain (search for similar items in EconPapers)
Date: 2008

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