International Comparisons in Higher Education Funding

Abstract

The use of appropriate indicators of public and private expenditures, from which statistically significant differences in funding policies can be identified, constitutes a solid foundation in which the assessment of the role of governments in promoting higher education can be grounded. Based on a carefully selected set of Organization for Economic Co‐operation and Development indicators, this paper explores the effects of education funding policies, along with research and development expenditures and tax levels, on the entry rate to higher education. The results from the statistical analysis of the data confirm the existence of two distinct approaches to higher education funding, the Scandinavian approach and Anglo–American approach, and help to define their characteristics.

Notes

1. Communalities actually measure the proportion of each variable's (indicator in our case) variance that is explained by the principal components. The higher the communality, the greater the impact of the indicator in the selection of the axes or factors. The coefficient matrix from the factor analysis contains the weights used to compute the total scores in the principal components.

2. Bartlett's test of sphericity (Bartlett, 1954) and the Kaiser–Meyer–Olkin (KMO) measure of sampling adequacy (Kaiser, 1974) are generated by the SPSS statistical package to help assess the factorability of the data. To consider the factor analysis appropriate the sphericity test should be significant (p<0.05). The KMO index takes values between 0 and 1. The closer to 1, the better. The minimum value to proceed further is 0.5, and 0.6 is suggested for a good factor analysis (Tabachnik and Fidell, 1996).

3. See Adrian Wooldridge, “The Brain Business” (Wooldridge, 2005), “the conservative argument (it is foolish to waste higher education on people who would rather study ‘Seinfeld’ than Socrates) falls at the first hurdle: Anglo‐Americanity. Higher education is rapidly going the way of secondary education: it is becoming a universal aspiration”.

4. “If more and more governments are embracing massification, few of them are willing to draw the appropriate conclusion from their enthusiasm: that they should either provide the requisite funds (as the Scandinavian countries do) or allow universities to charge realistic fees. Many governments have tried to square the circle through tighter management, but management cannot make up for lack of resources” (ibid.).