The Political Economy of Higher Education

As mentioned in the introduction, scholars of political economy have increasingly focused on how the formation of skills is organized in different nation-states and what repercussions corresponding institutional designs have on, for example, production modes (Iversen and Stephens 2008), employment patterns (Ansell and Gingrich 2013) and welfare state policy preferences (Busemeyer et al. 2011). However, only recently have authors focused their attention on the complex relationship between institutional arrangements structuring the set-up of higher education systems. Here, I draw on Ben Ansell’s (2008) recently proposed framework.

In essence, the author proposes that decision-makers are faced with a trilemma when designing (or changing) higher education systems. At any point in time, higher education systems logically can fulfil only two of three possible goals: high enrolment (defined as the proportion of individuals pursuing an academic degree after leaving secondary school), a high degree of public subsidization (defined as the amount of public money spent on each higher education student) and low public overall cost. To illustrate, if policy-makers put a premium on high enrolment and at the same time want to keep the overall cost of the higher education system as low as possible, they will not be able to highly subsidize each student, transferring the cost of higher education to private households in the process. Likewise, if policy-makers value high levels of public subsidization, for example to provide for a level playing field, they can only achieve it if they either limit enrolment or accept the overall cost of the higher education system to be a substantial burden on the public purse.

Accordingly, different configurations of two of the variables enrolment and degree of public subsidization lead to three ideal-typical models[1]: the elite model (low enrolment ratios and high public subsidization), the partially private model (high enrolment ratios and low public subsidization) and the mass model (both overall enrolment and public subsidization high).

Along with identifying these ideal types, Ansell develops a redistributive theory, positing that preferences over which system to implement are class-based and run counter to usual intuitions over public spending. Describing the preferences of three social strata, Ansell argues that the lower class will tend to prefer higher education systems with low levels of public subsidization (elite or partially private) because they are unlikely to benefit from increased public spending in higher education and will thus want to avoid the tax burden associated with it. At the other end of the spectrum, the upper class prefer to maintain an elite system since they receive higher education at any rate and do not stand to profit from either increased enrolment or subsidization. On the contrary, they might suffer relative losses once higher education becomes accessible to other strata.

Illustration of higher education system ideal types

Fig. 8.1 Illustration of higher education system ideal types

The middle class, finally, is perhaps the most interesting group within Ansell’s redistributive theory because their preferences are contextually dynamic and thus are the fulcrum for policy change: at elite levels of enrolment, the middle class prefers low levels of public subsidization, forming a cross-class coalition with the lower strata. Once enrolment expansion has led to their inclusion in higher education, however, they have a strong preference for high levels of public subsidization (Ansell 2008, 200).

How can different higher education systems be mapped according to these ideal types? In Fig. 8.1, the countries of the sample are plotted for the year of 2006 and along two dimensions characterizing higher education systems (public subsidization and enrolment). Data for both variables come from the database of the UNESCO Institute for Statistics.[2] Enrolment ratio—plotted on the x-axis—provides information about the number of individuals enrolled in higher education, expressed as a percentage of the total population of the five-year age group following the official secondary school graduation age. On the y-axis, Public subsidization per student indicates public expenditures per student, expressed as a percentage of gross domestic product (GDP) per capita. As a proxy for public spending, it includes both direct funding of public institutions as well as stipends and other subsidies for students enrolled in private institutions. In addition, it is free of the cofounding influence of enrolment because of its focus on individual students rather than the entire student body. With lines denoting the mean values for the variables, the elite system can be found in the upper left quadrant. Unsurprisingly, it is most thoroughly realized in Austria and Switzerland, both of which emphasize vocational over higher education (Busemeyer et al. 2011; Bernhard et al. 2013). Likewise, the mass systems can be found in the upper right quadrant, which is populated by the Scandinavian countries and the Netherlands. The partially private model, finally, appears in the lower right quadrant and is realized in a more diverse set of countries: Greece, Hungary, Israel, Poland and Spain. Another six countries are situated in the lower left quadrant. They thus constitute a fourth ideal type in which both enrolment and public subsidization take on low values and in which only one of the three overarching goals of higher education policy—low overall cost—is being realized.

This snapshot, taken at the middle of the time frame for analysis, roughly illustrates the sample countries’ position within the trilemma of higher education. It does not show, however, the trajectory of higher education systems between 2002 and 2010. As shown in Fig. 8.2, all countries except Estonia have expanded their higher education supply considerably within this span of time. The average increase in the enrolment ratio is almost 11 percentage points. Naturally, the biggest changes occurred in countries with low initial enrolment ratios, as elite and countries from the residual ideal type display high growth grates.

From a conceptual standpoint, therefore, the ongoing ‘massification’ of higher education as a fixed trend leaves countries with two choices within the trilemma: scale back public subsidization or incur escalating overall cost. As can be seen in Fig. 8.2, 15 of the 22 countries in the sample have decreased their per capita subsidization between 2002 and 2010, resulting in an average decline of —2.7 percentage points. This trend is

Change in enrolment and public subsidization, 2002-2010 (For reasons of data availability, the bars for Greece denote the change in between 2002 and 2006 only.)

Fig. 8.2 Change in enrolment and public subsidization, 2002-2010 (For reasons of data availability, the bars for Greece denote the change in between 2002 and 2006 only.)

especially apparent for elite model countries, where, with the exception of France, all countries have cut subsidization. These countries are moving towards the lower right quadrant of the plot, and if their trajectory persists they will end up with partially private higher education systems. This picture is more varied with regard to countries belonging to the other three ideal types, but a general trend towards the privatization of higher education costs can be stated.

In light of these trends, one might ask whether these higher education system variables affect equality of opportunity to access higher education by altering the cost-benefit analysis of individuals from different social backgrounds in weighing their decision to enrol at a university. The direction of this moderating impact, however, is not so clear a priori. Even when supply is high, prospective students from a low socioeconomic background may still be disadvantaged in accessing higher education, especially if public subsidization is low and costs associated with pursuing higher education therefore have to be incurred by private households. On the other hand, a high degree of public subsidization may generally be associated with a smaller impact of parental education on the likelihood to study, but this effect may very well depend on the supply side of higher education. If, for instance, only a small proportion of students have a chance to pursue an academic degree, it is perhaps unlikely that students displaying low levels of parental education will belong to the select few (hence the term elite model). Consequently, the question becomes what happens to the prospects of low-socio-economic status individuals when one takes into account the recent trajectory in which enrolment ratios are increased at the expense of per capita public subsidization.

  • [1] The third variable—overall cost of the higher education system—is essentially a function of theconfiguration of the other two. Put differently, overall cost increases as either enrolment or publicsubsidization increase.
  • [2] Data for Germany’s degree of public subsidization unfortunately is not available in the UNESCOdatabase. However, it was possible to calculate it to the UNESCO’s definition by resorting to dataprovided by the federal statistical office of Germany.
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