Increasing Graduation and Calling for More Autonomy in Higher Education: Is It a Good Thing? A Theoretical Model

Stefano Staffolani and Maria Recchioni

No 419, Working Papers from Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali

Abstract: This paper presents a theoretical model of enrollment decisions made by high school graduates, under the assumption that their choices are strongly influenced by the educational standard(s), roughly de ned as what students are expected to have learned by the end of the course. Higher standards reduce the probability of graduation but increase the accumulation of human capital and future earnings. The policy maker decides whether standards are set equally for all universities (centralization) or autonomously by each university (decentralization). In the centralized setting, the model establishes relationships among the standards that maximize di erent objectives: graduation, enrollment, and human capital. Speci cally, the standard that maximizes graduation is lower than the one that maximizes enrollment, which, in turn, is lower than the one that maximizes human capital. The decentralized setting may perform worse than the centralized one in terms of these three objectives if moving costs exist, while it always performs worse in terms of inter-generational mobility in education.

Keywords: Education; University; Standards; Human Capital; Inequality; Regulation of Educational System (search for similar items in EconPapers)
JEL-codes: I21 I23 J24 (search for similar items in EconPapers)
Pages: 42
Date: 2016-05
New Economics Papers: this item is included in nep-edu, nep-lma and nep-net
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Persistent link: https://EconPapers.repec.org/RePEc:anc:wpaper:419

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