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Regulation of University Admission Quotas in Metropolitan Areas and the Competition between Universities

Joo-hoon Kim

No 60, KDI Focus from Korea Development Institute (KDI)

Abstract: The excessive demand for universities in metropolitan areas as a result of location premiums and regulated admission quotas diminishes the competition between universities and the incentive to enhance educational performance to attract more students. Case in point are the lower graduate employment rates (measure of educational performance) of universities in metropolitan areas compared to those in non-metropolitan areas despite higher quality students. Additionally, the graduate employment rate of non-metropolitan universities are influenced by educational input factors such as an increase in the percentage of courses taught by full-time faculty while that of metropolitan universities are contingent merely on enrollees' entrance scores. Ergo, a structure that revitalizes the competition between universities and encourages them to improve their education services must be established in order to enhance the quality of higher education. - Increasing autonomy and promoting competition has been fundamental in reforming universities in advanced countries. - Universities in non-metropolitan areas that do not have regulated admission quotas have a larger incentive to improve their educational performance compared to universities in metropolitan areas that have excessive demand and location premium. - Even if the difference in students' competence levels in metropolitan and non-metropolitan universities is taken into consideration, the percentage of courses taught by full-time faculty remains higher for the latter. - The fact that the average graduate employment rate is lower for universities in metropolitan areas implies that there is a problem with regulating admission quotas. - Non-metropolitan universities' educational performance (graduate employment rate) is contingent on the efforts of the respective universities and not on students' competence levels. - Prospective students must be able to base their choice on detailed and transparent information and universities that are in low demand must be weeded out.

Date: 2015
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