Higher Education Reform in Europa : Some comments on the Bruegel Blueprint

1. Higher Education Reform in Europa :Some comments on the Bruegel Blueprint Reinhilde Veugelers (EC-BEPA,KULeuven & CEPR)

2. Main findings: low mobility How far can mobility be improved through policy? How effective is competition to improve performance with low mobility? • Endogeneous (low supply quality) or exogeneous (preferences, cultural barriers) ? • Intra- and extra-EU • Undergraduate, graduate, phd, post-doc, tenured researchers Motives and costs of mobility?

3. Foreign share of US degrees; by degree and field (2005); Source: NSF, S&E Indicators (2008)

4. Main findings:improvement in graduation rates, research performance lags behind • A more nuanced picture on Europe’s performance. • Although enrolment is growing strongly, the proportion of the population in the EU that has graduated from higher education is still relatively low • The European Union produces a higher number of PhDs than its major competitors (but has relatively less foreign students) • The EU produces more mathematics, science and technology graduates than the USA but has fewer researchers in the labour market • Tertiary Education leads to higher employment, lower unemployment and higher earnings, also in the EU: scope for private funding • Europe has caught up with the US on quantity of publications, the catching up in quality is slower: a gap remains on quality.

5. Unemployment rates for tertiary educated(among population aged 25-64, 2002) Source:EU, EEA: Eurostat. Others: OECD, Employment Outlook 2004 and Education at a Glance (2004)

6. Share in World Scientific Publications Source: NSF, S&E Indicators 2008 * RoWest= Canada and other Western Europe; **RoWorld is the residual;

7. Fastest growing EU countries in scientific publications (95-05) Source: NSF, S&E Indicators 2008 Country shares in EU-25 total; Only countries with above average world growth rates and at least 1000 publications are reported

8. Trends in publications shares across the quality distribution Source: NSF, S&E Indicators 2008 Note: Top1: 99th percentile of citations received (>21); Top10: 90th percentile (>6); the Bottom50 contains the publications with 0 or 1 citations; 1995 are all 91-93 articles cited by 1995 articles; 2000 are all 96-98 articles cited by 2000 articles; 2005 are all 2001-2003 articles cited by 2005 articles.

9. Main findings: diversity of governance structures in EU • Different dimensions of governance: • public/private ownership, external/internal stakeholder involvement, professional management, • Input autonomy: selection of students, budget (sources of funding, structure of spending), staff policy (hiring, wages) • Output autonomy: course content .. • Accountability: evaluation, funding rules • … • Empirical evidence (Bruegel, OECD…) finds a high variance in university governance across countries, as well as a difference in country dispersion across the different dimensions of governance: different dimensions of autonomy and accountability not necessarily correlated; each country is a unique bundle of governance characteristics • Is there an optimal governance structure? • Which dimensions of governance matter for performance?

10. Diversity in governance structures Source: Oliveira Martins et al., OECD (2007)

11. Main findings: underfunded EU universities • Total investment in higher education in the EU is below the level of key competitors, especially private funding • The differences in the level of private investment are a result of differences in tuition fees, in the share of private institutions, in philanthropic funding and in the level of funding provided by enterprises. • No clear evidence of underfunding of research at Higher Education institutes as compared to the US • But differences between the EU and the US in who and how funds are allocated, with the US having a more competition based funding system.

12. US JAP EU25 FIN DK SWE UK GER F RA Expenditures on R&D by Higher Education Sector, as % of GDP 0.36 0.42 0.40* 0.69 0.61 0.87* 0.40* 0.41 0.41 Total Expenditures on R&D as % of GDP 4 ) 2.68 3.13 1.81* 3.51 2.48 3.95* 1.88* 3.13 2.16 Share of Higher Education Sector in total R&D 13.6 13.4 22.1* 19.8 24.4 22.0* 21.4* 16.3 19.1 Higher Education Sector R&D financed by industry 5.0 2.8 6.5 * 5.8 3. 0 5.5* 5.5* 12.8 2. 7* Data are for 2004, unless * (=2003) Source : OECD, STI indicators 2007 Spending on Research in Higher Education

13. Findings:Linking governance and funding to (research) performance • Important to correct for other determining factors: Size, age, others (eg country specific effects)? • Budget per student affects positively research performance (nature of budget ? Student selection?) • The only governance indicator affecting performance: budget autonomy. Others? • The positive effects of having larger budgets per student are higher when the institutes enjoy a higher degree of budget autonomy • Policy should tackle simultaneously funding and governance. • More research is needed to pin down the drivers of university performance (research, education).

14. Reforming HE in Europe:some principles likely to hold • More funding: beyond size • More performance based public funding • More concentration of funding on excellence • More private funding • Better fee and subsidy structure • Addressing “access” through income-contingent loans • Better governance of universities: • autonomy and accountability • More competition among universities • A larger integrated market for HE • Allows for more differentiation/specialization • Allows for more effective competition A package deal

15. Universities have multiple tasks Beyond education, research (basic & applied), commercialization… Important implications for governance and design of funding • Multitasking of personnel/institutions: • Specialization ? • Design of funding/incentives for education taking into account research,… and vice versa

16. Implementing the necessary HE reforms requires ownership and coordinated action from all parties involved Member States, Commission, Universities, Students, Faculty, Private Sector…

17. Scope for EU in HE policy • EU funding (minor in total, but able to leverage?) • On research (matters indirectly for education in view of multitasking within universities) • FP, ERC, CIP… focus on excellence and networking: impact on education? • On education : Erasmus scholarships • Extend beyond undergraduate, graduate, Phds, post-docs.. • Rather than grants to institutions, more direct to individuals: “vote with their feet” • Income contingent loans : EU level (eg EIB) would offer more risk spreading opportunity and coordination on recovery ex post if EU mobility • EU structural funds for regional HE capacity building • EIB loans for capacity building

18. Scope for EU in HE policy • Monitoring capacity: • collection of data & methodologies on performance, governance and funding, comparable across countries and institutions • Diffusion of information on best policy practices, expertise in management of HE • OMC and NRP • Internal market for HE: • Certification, norms, regulations to ensure students can choose at EU level for HE products (cf Bologna.. • Establish an EU wide labour market for academics: recognition of academic qualifications, portability of rights & funding across MS… • Opening up of national funding schemes • Cross border service supply

19. Scope for EU in HE policy • EU scale capacity building (Phd, specific special areas..) eg EIT, EUI • Facilitator of intra-EU cooperation: eg European courses offered jointly by consortia and leading to joint degrees • EU as facilitator of global coordination in education policy and global mobility • Migration visa packages for researchers to enhance international mobility • Erasmus Mundus…

20. ConclusionTowards a more evidence and analysis based reform process of higher education Bruegel has set the right scene for the future agenda for research and policy discussion on Higher Education