Enrollment In Higher Education

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1. Introduction Enrollment in higher education has experienced explosive growth over the last 20 years, the result of school participation rates, increasing demand of the society and economy for specialised human resources, and the perceived importance of advanced education in subsequent life opportunities (“ADB Annual Report 2012). To accommodate these enrollment increases, higher education systems have had to expand out by constructing new universities, hiring new faculty members, diversifying delivery mechanisms, and allowing and encouraging the entry of private higher education providers. In many countries across the region, this, in turn, has required that higher education systems expand up. Faced with escalating demand for instructional…show more content…
The reasons put forward in defense of government interventions in this area are usually the following: first, and most importantly, empirical evidence on the positive effect of human capital on economic growth is quite strong (Barro & Sala-i-Martin, 2004). Bearing this in mind, higher education generates a positive externality and should be subsidised by public funds. The second major reason is more political: In the presence of credit constraints, public funding should allow a larger share of the population to enroll in higher education and thus lead to more equality in the long run. In addition, public education expenditures appear to be associated with a subsequent decrease in the level of income inequality and suggest that devoting more resources to education may be one way to reduce the level of income inequality within a country (Sylwester,…show more content…
From an economic viewpoint, several factors are expected to influence the degree of tertiary education enrollment. First of all, higher education is probably a normal good: The richer a country, the larger should be the share of agents consuming higher education – ceteris paribus. Second, enrollment rates should depend on the price of higher education. Assuming that higher public funding per student decrease marginal private cost without affecting the benefits of education, we expect countries with higher public spending to exhibit higher enrollment rates. Furthermore, theory suggests that higher private returns to education will have a positive effect on enrollment. However, it is probably also the case that increased supply of highly educated labour will decrease returns, complicating the empirical verification of this hypothesis. Another factor to be considered is the quality and level of subsidisation of primary and secondary schooling. Higher public spending on basic education spending will not only allow a larger fraction of the population to complete secondary education, but it is also likely to improve each student’s preparation and ability to complete tertiary

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