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CESifo Economic Studies Advance Access originally published online on May 22, 2008
CESifo Economic Studies 2008 54(2):248-276; doi:10.1093/cesifo/ifn010
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© The Author 2008. Published by Oxford University Press on behalf of Ifo Institute for Economic Research, Munich. All rights reserved. For permissions, please e-mail: journals.permissions@oxfordjournals.org

The Provision of Higher Education in a Global World—Analysis and Policy Implications

Gabrielle Demange*, Robert Fenge{dagger} and Silke Uebelmesser{ddagger}

* Paris School of Economics, and CESifo, e-mail: demange{at}pse.ens.fr
{dagger} Ifo Institute and University of Munich, and CESifo, e-mail: fenge{at}ifo.de
{ddagger} CES, University of Munich, and CESifo, e-mail: uebelmesser{at}lmu.de

Mobile students and graduates react to the institutional framework of higher education and on their turn induce changes in governmental policies. In this article, we are interested in how governmental decisions about the financial regime and the quality level of higher education interact with individual incentives to invest in higher education in closed economies and in economies open to migration. We show that mobility of (part of) the population results in a situation where the optimal instruments of the closed economy are no longer necessarily viable. The aim of the article is to derive policy implications as to the optimal financial regime and quality level of higher education in the presence of migration opportunities. (JEL codes: H77, I22, I28)

Key Words: Higher education • funding • quality competition • migration • policy implication

Financial support of the Bavarian-French Centre of Cooperation (BFHZ-CCUFB) is gratefully acknowledged. We are also grateful for support by the WGL Leibniz Association within the project "How to Construct Europe?". This paper has been presented at the CESifo Workshop on "Innovation and Higher Education Reform", Venice, 18–19 July 2007. We thank the organizers Reinhilde Veugelers and Rick van der Ploeg as well as our discussant Matthias Parey and the participants for helpful comments.


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