The effects of Bologna Process on expenditure in HE systems

of EU-15 countries

Tommaso Agasisti (Politecnico di Milano, Italy)Tommaso Agasisti (Politecnico di Milano, Italy)

Carmen Pérez Esparrells (UAM, Spain)Carmen Pérez Esparrells (UAM, Spain)

Giusepe Catalano (Politecnico di Milano, Italy)Giusepe Catalano (Politecnico di Milano, Italy)

Susana Morales Sequera (UAM, Spain)Susana Morales Sequera (UAM, Spain)

30 th Annual EAIR Forum30 th Annual EAIR Forum(Copenhagen 2008)(Copenhagen 2008)

Agenda

Motivation Objectives Methodology and data Results Conclusions

The motivation

Education => economic growth Patterns of HE expenditure Bologna process => process of

convergence of educational policy (the objective: implementation of EHEA with common characteristics by the end of 2010)

The context

Bologna Process: some characteristics The idea has fully overcome the first

expectations. Why? Educational dimension => we are in the

line of convergence Economic dimension =>

convergence? (our research question) Social dimension => the new challenge

Objectives

Analysis of indicators of financial resources invested in HE (1998-2004) and verifying if is there a process of convergence in expenditure per student in HEIs.

Estimating if the wealth of countries (measured by GDP per capita) has influenced the process of convergence.

Data

Dependent variable: Expenditure per student

Determinants: GDP per capita; % population who attained tertiary education; expenditure for HE as %GDP public funds to HE as a % of total HE

expenditure “Bologna effect” (dummy)

SOURCE: OECD data (Education at a Glance from 2002 to 2007)

Methodology

Two approaches:

Regression analysis: fixed-effects and random-effects to detect a “Bologna effect”

Convergence analysis: Absolute convergence (β-convergence) Conditional β-convergence σ-convergence

σ-convergence

The most important measure of cross-section analysis of dispersion that has been used: coefficient of variation (Barro & Salas-i-Martin).

σ-convergence occurs if dispersion among countries falls in time.

t

n

itti

H

HHn

CV

1

2

,

1

β-convergence

A process of absolute convergence (β-convergence) exists if countries with lower expenditure per student in HEIs levels have grown to higher rates than countries with better levels.

β-convergence is calculated with the estimation of β in the following regression:

β-convergence will exist if parameter β is positive and statistically significant

tiji

T

ji

ti HT

e

H

H

T ,,,

, )ln(1

)ln(1

Conditional β-convergence

In many situation an absolute convergence (β-convergence) cannot take place since there are different structural conditions between the different countries, so that they do not converge at a unique equilibrium point. There is absolute convergence if regions have the same starting level.

In these cases, we use what Sala-i-Martin (1996), Barro and Sala-i-Marti (1992) and Mankiw, romer and Weil (1992) denominated conditional convergence (including an other explanatory variable).

Results of regression analysis

VariableModel 1 _

Fixed effects

Model 2 _ Fixed effects

Model 1 _ Random

effects

Model 2 _ Random

effectsGDP per capita 0.224 0.156 0.253 0.191% Population who attained tertiary education

91.860 61.804 62.311 54.232

Expenditure for tertiary education as %GDP

4,712.771 4,252.536 4,631.556 4,495.252

Public funds for tertiary education as %total

3.456 1.676 -3.593 -4.471

Bologna Process (Dummy) 756.482 630.207

Constant -4,100.000-

1,400.000-5,200.000 -1,800.000

N 69 69 69 69r2 0.613 0.658 Rmse 697.812 663.105 700.4 666.964F 20.211 19.201

Results of σ-convergence

Source: authors’ elaboration

0,27

0,29

0,31

0,33

0,32

0,31

0,26

0,20

0,22

0,24

0,26

0,28

0,30

0,32

0,34

2004200320022001200019991998

Coe

ffic

ient

of v

aria

tion

Results of β-convergence

1998-20041998-2004 1998-20011998-2001 2001-20042001-2004

ββ0.046996*(1.842133)

0.028227(0.560432)

0.082504**(2.563208)

αα0.424430**(2.462573)

0.315045(0.760094)

0.7131112**(3.092728)

Adjusted RAdjusted R22 21.35% -5.33% 34.46%

ββ(%)(%) 4.7% 2.8% 8.2%

Notes: t-Statistic in parenthesis. The coefficients are statistically significant with a confidence of 90%(*) or 95%(**).

Results of β-convergence in the entire period

All the estimated parameters are statistically significant .

β positive informs about absolute convergence.

The goodness of fit is only 21.35%, which indicate scarce relation between both variables. However, in the period 2001-2004 is 34%.

Results of conditional β-convergence

We also investigated whether convergence in the period 1998-2004 has been affected by national wealth, in this case, GDP per capita.

In consequence, we ran a new estimation of the model including GDP per capita.

The inclusion of GDPpc is only significant in the period 1998-2001 (after that period, the convergence is due to Bologna Process?)

Results of conditional β-convergence

1998-20011998-2001

Conditional convergenceConditional convergence

ββ0.251728*(2.126098)

αα1.238494***(3.038887)

λλ0.0000194***(3.386701)

Adjusted RAdjusted R22 43.75%

Notes: t-Statistic in parenthesis. The coefficients are statistically significant with a confidence of 90%(*), 95%(**) or 99%.

Results of conditional β-convergence

The introduction of GDPpc in the period 1998-2001 increases significantly the estimated parameters and increases the goodness of fit until 43.75%.

In this period the growth rate of expenditure per student had been influenced by the level of GDPpc

Countries have converged to different stationary states; that is, GDPpc variable explains cross-country patterns of growth in expenditure per capita in this period, before Bologna Process.

Conclusions

The results of “financial” convergence for all the period (1998-2004) are clear and they are going in the “right” direction. We show evidence of an approaching process in the composition of HEIs expenditure per student in EU-15 countries.

We have also identified that this convergence was more marked in the second part of the observation period, after Bologna process.

New research: with data until 2010 what’s happen in the long term?

Maybe, these difference in terms of expenditure per student will be less for a “natural” process

ConclusionsThe role of private sector in explaining the convergence in expenditure per student