Home > Publications . Search All . Browse All . Country . Browse PSC Pubs . PSC Report Series

PSC In The News

RSS Feed icon

Frey and colleagues outline 10 trends showing scale of America's demographic transitions

Starr says surveys intended to predict recidivism assign higher risk to poor

Prescott and colleagues find incidence of noncompetes in U.S. labor force varies by job, state, worker education

Highlights

PAA 2015 Annual Meeting: Preliminary program and list of UM participants

ISR addition wins LEED Gold Certification

PSC Fall 2014 Newsletter now available

Martha Bailey and Nicolas Duquette win Cole Prize for article on War on Poverty

Next Brown Bag

Mon, March 9
Luigi Pistaferri, Consumption Inequality and Family Labor Supply

On the optimal allocation of students and resources in a system of higher education

Archived Abstract of Former PSC Researcher

Sallee, James, A.M. Resch, and Paul Courant. 2008. "On the optimal allocation of students and resources in a system of higher education." B E Journal of Economic Analysis & Policy, 8(1).

We model the social planner's decision to establish universities and populate them with students and resources, given a distribution of student ability and a limited pool of resources for higher education. If student ability and school resources are complements, and if there is a fixed cost to establishing a school, then the optimal allocation will involve a tiered system of higher education that sorts students by ability. In contrast to previous research, we show this tiered system is optimal even in the absence of peer effects. In considering where to locate students, the planner balances the benefit of providing students with more resources against the congestion costs of overcrowding schools. Nearly identical students who are close to the margin of entry to a higher or lower tier will experience discrete gaps in education quality. In considering how many universities to establish, the planner will balance the value of more precise tailoring against the cost of establishing additional schools. The planner's inability to perfectly tailor education quality will result in both winners and losers. Our model also makes predictions about how university systems that serve different populations should vary. Larger systems will produce more per dollar of expenditures and more education per student, due to economies of scale.

DOI:10.2202/1935-1682.1871 (Full Text)

Licensed Access Link

Public Access Link

Browse | Search : All Pubs | Next