AHMET YESEVİ ÜNİVERSİTESİ

EĞİTİM YÖNETİMİ VE DENETİMİ YÜKSEK LİSANS PROGRAMI

                             

 

 

                     TEYÖ-605 -Eğitim Planlaması ve Ekonomisi  Dönem Ödevi

 

                      Bir adet İngilizce yazılmış eğitim ekonomisi ile ilgili makale özeti

 

 

 

                                                   HAZIRLAYAN

                             102177125  Mehmet Emin ÖNDER

 

 

                                                         DANIŞMAN
                                                        Erdal  GÜMÜŞ

                                                        ARALIK  2010

 

 

 

 

 

 

 

 

Funding universities for efficiency and equity: research findings versus petty politics.

 

There is a differentiation between the research findings regarding efficiency and equitable financing and the actual public funding of universities.

 

§ 1. Introduction

 

There are many activities in universities that need to be funded for example the hospitals, prisons and roads. In private sector making funding decisions is much easier because, Toyota has a well-defined objective - to maximize profits. The Finance Minister has also an objective to maximize the social welfare.

There are two important arguments on efficiency and equity. The size of efficiency is by the size of the country pie (Y= Gross National Product (GNP)) and by equity its distribution (1-Gini).

 

The problem reduces to maximize social well-being (SW) subject to tax revenue (T) constraints: Max SW = (Y) ª (1- Gini) ß subject to public spending ≤ T

 

Briefly, this model imposes rigor and discipline in budgetary allocation decisions, away from rhetoric and minutiae.

 

§ 2. What we know

 

2.1  On Efficiency

Efficiency measure allocations universities is the rate of return

Table 1: Returns to university education – OECD countries. This, funding universities is a primarily and socially efficient investment

 

 

 

 

 

2.2  On Equity

Table 2: Indicates three levels of education: below upper secondary, upper secondary and tertiary. Each level is associated with higher earnings on average and this is universal findings in all countries.

 

 

 

Distribute justice of education subsides is an important system that is, who really pays, who really benefits from public education expenditure.

The study results indicated that families with children enrolled in public higher education received a positive net transfer (subsidy less taxes paid). These net transfers were an increasing share of family income.

Eligibility for the higher-subsidy institutions was related tot family income. The other looking way in this topic, is to compare occupational background of students’ fathers with the general population of the fathers’ age group.

§ 3. Public finance

 

It is generally agreed that general tax should be allocated to activities where market on information failure results in suboptimal investments in that activity.

University public financing may be appropriate if the production of university graduates were associated with substantial externalities.

 

§ 4.  What we do not know

 

Infect both secondary and territory education should have positive externalities. For making on effective allocation decision one need a wide social rate of return. That would inside the value of expenses.

 

§ 5.  Present funding allocation state

 

There is a difference between countries in the private share of the GDP (Gross Domestic Product) devoted to higher education. The higher the private funding, the more resources are available to universities. Ordering of the private share of university funding coincides with the university quality. In the United States, universities have higher endowments relative to European ones. It is important on university, the freedom to appoint and fire professors, and the ability to retain the stars.

 

§ 6.  Why university subsides prevail?

 

These subsides cannot be based on externalities and equity. Funding universities is the results of aggregating, agreeing, disagreeing and indifferent voter preferences. Free provision of higher education appeals to the majority of voters. Free higher education is not really free and it can have terrible socio-economic effects.

 

§ 7.  Conclusion

 

Financing of universities as private is a zero-sum game. Acquiring a university degree is a highly profitable investment in all countries. University education is also a socially profitable investment.

Unfortunately, there is not evidence on the wide social returns to education that include externalities. Considering equity, all evidence points unequivocally to the regressive effect of present university finance mechanisms in all countries in the world. There is the poor pay for education of the rich. Present university public finance mechanisms are both inefficient and inequitable. Today the most efficient and equitable way of finance higher education is to allocate public funds to universities in an indirect way. So, student may decide what universities will get funds and what other university may close because of lack of funds. If more money is put in poorer students hands equity would be compensated. In Europe, is no equivalent, because there is an ECOFIN imposing fiscal disciple. It is called EDUFIN. Higher education has a future in the best evidenced in Europe in recent announcement of the Minster of Education. So universities will be the only ruin of nationalized industries in Europe.