Download - Al Alt Econ Lit Review Presentation
June 4, 2010 1
Presented by:Al Alt
Knowledge economy is driving the world ◦ Despite knowledge economy, education is in
“crisis” due to fiscal stress (World Bank, 1994)
Despite knowledge economy, education worldwide is in crisis (World Bank, 1994)
Fiscal stress due to demands on public funds driving fiscal stress
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All major industrialized nations are grappling with the issue of financing education
There are several reasons contributing to a worldwide struggle to fund higher education:◦ Taxation◦ Supply and Demand◦ Opportunity Cost
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All major nations fund a portion of higher education through taxation◦ Even developing countries contribute significant
public funds to higher education In major developed nations, taxation cannot
keep pace with the rising cost of higher education
In developing nations, taxation is not efficient enough or sufficiently developed
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Supply of higher education is greater than ever
Demand pressure is greater than supply◦ Increase in college aged population◦ Increase in people desirous of higher education
Students are informed consumers, the knowledge economy is driving the world
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Constrained public dollars are creating competition and foregone opportunities for public dollars
There are severe unmet needs of other choices dominate the funding of higher education◦ Infrastructure◦ Public health◦ Compulsory education◦ Transportation
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National Trends follow worldwide trends
Rising unemployment is driving demand for higher education
78 million baby boomers are preparing for retirement◦ largest and best educated generation in the
nation’s history ◦ state spending on higher education will have to
increase faster than state spending in other areas
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Efficiency◦ Become more client responsive◦ Higher education as a business
Public vs. Private◦ Notion of private being more efficient◦ Diversification of offerings
Cost sharing◦ Additional fees and tuition borne by student◦ Loans and grants
Supplementing governmental funds◦ Philanthropy and entrepreneurship
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Higher education worldwide in “fiscal stress”◦ High demand on public dollars◦ Opportunity cost related to other public programs◦ Taxation cannot keep pace◦ Demand for higher education is extreme
National and worldwide solutions are uniform◦ Efficiency◦ Cost Sharing◦ Public vs. Private◦ Philanthropy and entrepreneurship
Reform is being driven by knowledge economy and excess demand
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Presented by:Al Alt