Higher Education Some International comparisons Domingo Docampo Universidade de Vigo (Spain) On sabbatical at ECE-UNM

Outline of the Talk World Demand of Higher Education World Demand of Higher Education The case of Australia The case of Australia Two models of Higher Education Funding Two models of Higher Education Funding OECD Indicators for the two models OECD Indicators for the two models How to tell the models apart? How to tell the models apart? ARWU data on research ARWU data on research Comparative performance of countries and US regions Comparative performance of countries and US regions Two conclusions Two conclusions

World’s demand of HE Enrolment in Higher Education Enrolment in Higher Education 97M students in M students in M in 2025 (predicted) 263M in 2025 (predicted) Mobility in Higher Education Mobility in Higher Education 1.9M foreign in 2000 (2%) 1.9M foreign in 2000 (2%) 7.2M in 2025 (3%) 7.2M in 2025 (3%)

World’s share of international students ( )

Mobility from Asia (1 million)

Asian mobility relative to GDP

Mobility to Australia

What happened in Australia ?  Policy Reforms in 1987  Income-contingent loans  Government change in 1996  New Higher Education Act 2003  Changes in Tuition  Internationalization of HE

On Tuition If tuition was the answer, then what was the question? If tuition was the answer, then what was the question? Governments felt financially pressured, began to question whether higher education is a public good? Governments felt financially pressured, began to question whether higher education is a public good? Private benefits do accrue to graduates. Private benefits do accrue to graduates. Positive externalities: Good citizens, Good taxpayers. Positive externalities: Good citizens, Good taxpayers. Debate in Australia 1986 Debate in Australia 1986 New Zealand followed suit New Zealand followed suit UK in 2003 UK in 2003 Taboo in Continental Europe Taboo in Continental Europe

The case for and against Higher Education as a public good Education is a basic right Education is a basic right Graduates will return the benefits by paying more taxes (around US$ 200,000 during a lifetime) Graduates will return the benefits by paying more taxes (around US$ 200,000 during a lifetime) Income tax is paid by many more non-graduates than graduates: free higher education is horizontally inequitably Income tax is paid by many more non-graduates than graduates: free higher education is horizontally inequitably The taxpayer gets a good deal is a dangerous argument (R&D expenses) The taxpayer gets a good deal is a dangerous argument (R&D expenses)

Two models Anglo-American model Anglo-American model Encourages Diversity Encourages Diversity Heterogeneous Institutions Heterogeneous Institutions Quality comparisons Quality comparisons Scandinavian model Scandinavian model All programs ‘are’ equal All programs ‘are’ equal Homogeneous Institutions Homogeneous Institutions Quality of a Public Service Quality of a Public Service

Two approaches to HE Funding Utopian Utopian Very high taxes Very high taxes R&D commitment R&D commitment High Public Spending High Public Spending High Enrolment High Enrolment Practical Practical Much lower taxes Much lower taxes R&D commitment R&D commitment High Private Spending High Private Spending High Enrolment High Enrolment

Are there utopian countries? Is there a way to tell a country apart? Is there a way to tell a country apart? Shouldn’t it be obvious? Shouldn’t it be obvious? Rationalize the obvious using Rationalize the obvious using OECD data OECD data OECD indicators OECD indicators The Economist and World Bank Indicators The Economist and World Bank Indicators

Set of Indicators Taxes on Average worker (I5) Taxes on Average worker (I5) Enrolment (I6) Enrolment (I6) Percentage of GDP of: Percentage of GDP of: Public expenditure on Education (I1) Public expenditure on Education (I1) Public expenditure on HE (I2) Public expenditure on HE (I2) Private expenditure on HE (I3) Private expenditure on HE (I3) Total spending on HE (I4) Total spending on HE (I4) Gross domestic expenditure on R&D (I7) Gross domestic expenditure on R&D (I7)

Main data Table

Correlation Matrix

Total vs. Public Expenditures

TAXES vs PRIVATE EXPENDITURES

Total Expenditures in HE vs. Enrolment

PRINCIPAL COMPONENTS

PRINCIPAL COMPONENT 1

PRINCIPAL COMPONENT 2

Understanding the data Normalize indicators: best gets 100 points Normalize indicators: best gets 100 points Rearrange proportionally Rearrange proportionally Subtract OECD average Subtract OECD average Look at the sign of the correlation Look at the sign of the correlation I1, I2 and I5 correlate positively. I1, I2 and I5 correlate positively. I3 correlates negatively with them all. I3 correlates negatively with them all. I4 and I6 correlate positively I4 and I6 correlate positively

A measure for Utopia M1 first principal component using only I1, I2, I3 and I5 M1 first principal component using only I1, I2, I3 and I5 M2 first principal component using only I4, I6 and I7 M2 first principal component using only I4, I6 and I7

The new clustering

LANDING FROM UTOPIA

LANDING FROM THE FUTURE

Quality Assessment Shanghai Jiao Tong University’s Academic Ranking of World Universities Shanghai Jiao Tong University’s Academic Ranking of World Universities Based on Scientific Production Based on Scientific Production Sound Indicators Sound Indicators Reliable Data Reliable Data Data can be aggregated for countries Data can be aggregated for countries Allows international comparisons Allows international comparisons It is not the whole story but… It is not the whole story but…

ARWU

CORRELATION MATRIX

HOW GOOD ARE THE BETTER

Cutting the US in European like slices

How good are the better now

Compare only the best university Given a REGION X, let N(X) be equal to Given a REGION X, let N(X) be equal toGDP(US)/GDP(X) Let USX be the median of the first N(X) US universities’ rank. Let USX be the median of the first N(X) US universities’ rank. Let Lag(X) be the difference between the rank of the best university from region X and USX. Let Lag(X) be the difference between the rank of the best university from region X and USX. Normalize the result lag(X)/USX Normalize the result lag(X)/USX

Prima Donna (1)

Prima Donna (2)

Prima Donna (3)

Universities in ARWU

HOW GOOD ARE THE BETTER?

CLUSTERING (25-500)

RANKING ACROSS ARWU

From 50 to 500

From 100 to 500

Over-share of GDP (500)

BEST 500 (GDP SHARE)

CORRELATION MATRIX

Sci (500)

Quality vs Quantity (500)

Quality Indicators

Conclusions (1) There are indeed two models to properly fund Higher Education There are indeed two models to properly fund Higher Education Choose one, but please, to the fullest. Choose one, but please, to the fullest.

Conclusions (2) Benchmarking is a good basis for improvement. Through international benchmarking countries can identify best practices and ways forward. Benchmarking is a good basis for improvement. Through international benchmarking countries can identify best practices and ways forward. Identify the appropriate incentives to encourage and reward excellence. Identify the appropriate incentives to encourage and reward excellence.

Conclusions (3) Galbraith once said that given the choice of proving that changes are unnecessary, most people… Galbraith once said that given the choice of proving that changes are unnecessary, most people… Please, do not. Please, do not. THANKS THANKS

HiCi (500)

S&N (500)

ACROSS ARWU

ACROSS ARWU (2)

International Students (2)

International Students

What is a Public Good? Excludable Goods Excludable Goods Rival Goods Rival Goods GoodExcl. Not Excl. Rival Tradable Good Natural Resources Not Rival Natural Monopoly Public Good

Some Public Goods National Defense National Defense Public Highways Public Highways Health National System (Europe) Health National System (Europe) Google? Google? Primary Education Primary Education Secondary Education Secondary Education Higher Education? Higher Education?

Comments on the Indicators Public Expenditures = OECD indicator B4, direct public expenditures on educational institutions plus subsidies to households. Public Expenditures = OECD indicator B4, direct public expenditures on educational institutions plus subsidies to households. Private expenditures = OECD indicator B2, funding to educational institutions. Private expenditures = OECD indicator B2, funding to educational institutions. Enrolment = gross enrolment ratio: actual number enrolled as a percentage of the number of youth in the official age group (World Bank Data, The Economist) Enrolment = gross enrolment ratio: actual number enrolled as a percentage of the number of youth in the official age group (World Bank Data, The Economist)

Diversity Span

Countries under study

Compare only the best (2) Let X be Australia Let X be Australia GDP (US)/GDP(AUS)=19.3 GDP (US)/GDP(AUS)=19.3 ARWU(10th US University)=USX=12 ARWU(10th US University)=USX=12 ARWU(Best(AUS))=54 ARWU(Best(AUS))=54 lag(AUS)=54-12=42 lag(AUS)=54-12=42 The Australian National University should gain 42 ranking positions to match the median of the first 20 US universities The Australian National University should gain 42 ranking positions to match the median of the first 20 US universities Lag(AUS)/USX=42/12=3.5 Lag(AUS)/USX=42/12=3.5